COVERED PUT	PUT BACKSPREAD
About Strategy	Covered Put Option Strategy  This strategy is exactly opposite to Covered Call Strategy. Here the investor is neutral or moderately bearish in nature and wants to take advantage of the price fall in the near future. The trader will short one lot of stock future. Now the trader will short ATM Put Option, the option strike price will be his exit price. If the prices rally above the strike price, the 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 PUT Vs PUT BACKSPREAD - Details

	COVERED PUT	PUT BACKSPREAD
Market View	Bearish	Bearish
Type (CE/PE)	PE (Put Option) + Underlying	PE (Put Option)
Number Of Positions	2	2
Strategy Level	Advance	Advance
Reward Profile	Limited
Risk Profile	Unlimited
Breakeven Point	Futures Price + Premium Received

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

	COVERED PUT	PUT BACKSPREAD
Market View	Bearish	Bearish
When to use?	The Covered Put works well when the market is moderately Bearish.
Action	Sell Underlying Sell OTM Put Option
Breakeven Point	Futures Price + Premium Received

COVERED PUT Vs PUT BACKSPREAD - Risk & Reward

	COVERED PUT	PUT BACKSPREAD
Maximum Profit Scenario	The profit happens when the price of the underlying moves above strike price of Short Put.
Maximum Loss Scenario	Price of Underlying - Sale Price of Underlying - Premium Received
Risk	Unlimited	Limited
Reward	Limited	Unlimited

COVERED PUT Vs PUT BACKSPREAD - Strategy Pros & Cons

	COVERED PUT	PUT BACKSPREAD
Similar Strategies	Bear Put Spread, Bear Call Spread
Disadvantage	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.
Advantages	• Investors can book profit when underlying stock price drop, move sideways or rises by a small amount. • Able to generate monthly income. • Able to generate profit from fall in prices or mild increase in the prices.