BEAR PUT SPREAD	COVERED COMBINATION
About Strategy	Bear Put Spread Option Strategy  When a trader is moderately bearish on the market he can implement this strategy. Bear-Put-Spread involves buying of ITM Put Option and selling of an OTM Put Option. If prices fall, the ITM Put option starts making profits and the OTM Put option also adds to profit at a certain extent if the expiry price stays above the OTM strike. However, if it falls below the OTM Read more..	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..

BEAR PUT SPREAD Vs COVERED COMBINATION - Details

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

BEAR PUT SPREAD Vs COVERED COMBINATION - When & How to use ?

	BEAR PUT SPREAD	COVERED COMBINATION
Market View	Bearish	Bullish
When to use?	The bear call spread options strategy is used when you are bearish in market view. The strategy minimizes your risk in the event of prime movements going against your expectations.	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	Buy ITM Put Option, Sell OTM Put Option	Sell 1 OTM Call, Sell 1 OTM Put
Breakeven Point	Strike Price of Long Put - Net Premium	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

BEAR PUT SPREAD Vs COVERED COMBINATION - Risk & Reward

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

BEAR PUT SPREAD Vs COVERED COMBINATION - Strategy Pros & Cons

	BEAR PUT SPREAD	COVERED COMBINATION
Similar Strategies	Bear Call Spread, Bull Call Spread	Stock Repair Strategy
Disadvantage	• Limited profit. • Early assignment risk.	Combinations can be profitable in sideways or rising markets. Greater combined net credit increases downside protection and potential return.
Advantages	• If the strike price, expiration date or underlying stocks are rightly chosen then risk of losses would be limited to the net premium paid. • This strategy works well in declining markets. • Limited risk.	Limited Maximum Profit on the upside. Covered Combinations should only be traded on stocks that are bullish.