Investment Type: Debit
Strike Prices:ITM for 1st bought leg, ATM (near the money) for sold leg, OTM for 2nd bought leg.
Expiration Month: Same expiration months for all legs and should be current month
Composition: Buy higher strike Put + Sell 2 middle strike Put + Buy lower strike Put

Long Put Butterfly has the exact properties of Long Call Butterfly. It is a combination of Bear Put Spread and Bull Put Spread. This strategy requires a low cost and has a nice risk reward ratio but the stock price has to stay near the middle strike on the expiration date in order to get maximum reward.

The difference between Long Call and Long Put Butterfly is that we use Put Options instead of Calls Options. The logical reason for this is that a stock will have slightly bullish or bearish bias with it that affects the pricing of Calls and Puts. By comparing the price of Calls and Puts, we will be able to determine which one has a better risk reward ratio between Long Call Butterfly and Long Put Butterfly. But the difference won’t be substantial.

In other words, this strategy is similar to Short Straddle without its unlimited risk component, however Long Put Butterfly has narrower range for its breakeven point.