PROTECTIVE PUT	BEAR PUT SPREAD
About Strategy	Protective Put Option Strategy Protective Put Strategy is a hedging strategy where trader guards himself from the downside risk. This strategy is adopted when a trader is long on the underlying asset but skeptical of the downside. He will buy one ATM Put Option to hedge his position. Now, if the underlying asset moves either up or down, the trader is in a safe position. Read more..	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..

PROTECTIVE PUT Vs BEAR PUT SPREAD - Details

	PROTECTIVE PUT	BEAR PUT SPREAD
Market View	Bullish	Bearish
Type (CE/PE)	PE (Put Option)	PE (Put Option)
Number Of Positions	1	2
Strategy Level	Beginners	Advance
Reward Profile	Unlimited	Limited
Risk Profile	Limited	Limited
Breakeven Point	Purchase Price of Underlying + Premium Paid	Strike Price of Long Put - Net Premium

PROTECTIVE PUT Vs BEAR PUT SPREAD - When & How to use ?

	PROTECTIVE PUT	BEAR PUT SPREAD
Market View	Bullish	Bearish
When to use?	This strategy is adopted when a trader is long on the underlying asset but skeptical of the downside.	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.
Action	Buy 1 ATM Put	Buy ITM Put Option, Sell OTM Put Option
Breakeven Point	Purchase Price of Underlying + Premium Paid	Strike Price of Long Put - Net Premium

PROTECTIVE PUT Vs BEAR PUT SPREAD - Risk & Reward

	PROTECTIVE PUT	BEAR PUT SPREAD
Maximum Profit Scenario	Price of Underlying - Purchase Price of Underlying - Premium Paid	Max Profit = Strike Price of Long Put - Strike Price of Short Put - Net Premium Paid.
Maximum Loss Scenario	Premium Paid + Purchase Price of Underlying - Put Strike + Commissions Paid	Max Loss = Net Premium Paid.
Risk	Limited	Limited
Reward	Unlimited	Limited

PROTECTIVE PUT Vs BEAR PUT SPREAD - Strategy Pros & Cons

	PROTECTIVE PUT	BEAR PUT SPREAD
Similar Strategies	Long Call, Call Backspread	Bear Call Spread, Bull Call Spread
Disadvantage	• Value of protective put position decreases as time passes • Holding period of the protective put can be affected by the timing as a result tax rate on the profit or loss from the stock can be affected.	• Limited profit. • Early assignment risk.
Advantages	• Unlimited potential profit due to indefinitely rise in the underlying stock price . • This strategy allows you to hold on to your stocks while insuring against losses. • Hedging strategy, trader can guard himself from the downside risk.	• 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.