COVERED COMBINATION	PUT BACKSPREAD
About Strategy	Covered Combination Option Strategy This strategy involves selling OTM Call & Put Options and buying the underlying asset in either cash or futures market. It is also known as Covered Strangle as the profits are capped and risk is potentially unlimited. Risk: Un Read more..	Put Backspread Option Strategy If the trader is bearish on market and bullish in volatility, he will implement this strategy. However the trader can be neutral in nature i.e. indifferent if the market moves in either of the direction, this strategy will make profits, but uptrend will give a capped income than downtrend which will give unlimited returns. Read more..

COVERED COMBINATION Vs PUT BACKSPREAD - Details

	COVERED COMBINATION	PUT BACKSPREAD
Market View	Bullish	Bearish
Type (CE/PE)	CE (Call Option) + PE (Put Option)	PE (Put Option)
Number Of Positions	2	2
Strategy Level	Advance	Advance
Reward Profile	Limited
Risk Profile	Unlimited
Breakeven Point	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

COVERED COMBINATION Vs PUT BACKSPREAD - When & How to use ?

	COVERED COMBINATION	PUT BACKSPREAD
Market View	Bullish	Bearish
When to use?	This strategy is mainly suited for investors who are moderately bullish on a stock and are comfortable with increasing their position in the event of a price decline.
Action	Sell 1 OTM Call, Sell 1 OTM Put
Breakeven Point	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

COVERED COMBINATION Vs PUT BACKSPREAD - Risk & Reward

	COVERED COMBINATION	PUT BACKSPREAD
Maximum Profit Scenario	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received - Commissions Paid
Maximum Loss Scenario	Purchase Price of Underlying + Strike Price of Short Put - (2 x Price of Underlying) - Max Profit + Commissions Paid
Risk	Unlimited	Limited
Reward	Limited	Unlimited

COVERED COMBINATION Vs PUT BACKSPREAD - Strategy Pros & Cons

	COVERED COMBINATION	PUT BACKSPREAD
Similar Strategies	Stock Repair Strategy
Disadvantage	Combinations can be profitable in sideways or rising markets. Greater combined net credit increases downside protection and potential return.
Advantages	Limited Maximum Profit on the upside. Covered Combinations should only be traded on stocks that are bullish.