COVERED COMBINATION	CHRISTMAS TREE SPREAD WITH PUT OPTION
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..	Christmas Tree Spread with Puts Option Strategy This Strategy is an advance option strategy that consists of three legs and six total options. In this strategy buying one put at strike price D, skipping strike price C, writes three calls at strike price B, and buying two calls at strike price A for same expiration dates for neutral to bearish forecast. An investor used this strategy to potential returns .. Read more..

COVERED COMBINATION Vs CHRISTMAS TREE SPREAD WITH PUT OPTION - Details

	COVERED COMBINATION	CHRISTMAS TREE SPREAD WITH PUT OPTION
Market View	Bullish	Bearish
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option)
Number Of Positions	2	6
Strategy Level	Advance	Advance
Reward Profile	Limited	Limited
Risk Profile	Unlimited	Limited
Breakeven Point	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2	Lowest strike prices + the half premium – premium paid

COVERED COMBINATION Vs CHRISTMAS TREE SPREAD WITH PUT OPTION - When & How to use ?

	COVERED COMBINATION	CHRISTMAS TREE SPREAD WITH PUT OPTION
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.	This Strategy is used when an investor wants potential returns.
Action	Sell 1 OTM Call, Sell 1 OTM Put	Buying one ATM, Selling 3 Puts, Buying one more OTM Put
Breakeven Point	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2	Lowest strike prices + the half premium – premium paid

COVERED COMBINATION Vs CHRISTMAS TREE SPREAD WITH PUT OPTION - Risk & Reward

	COVERED COMBINATION	CHRISTMAS TREE SPREAD WITH PUT OPTION
Maximum Profit Scenario	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received - Commissions Paid	Equal middle strike price – higher strike price – the premium
Maximum Loss Scenario	Purchase Price of Underlying + Strike Price of Short Put - (2 x Price of Underlying) - Max Profit + Commissions Paid	Net Debit paid for the strategy.
Risk	Unlimited	Limited
Reward	Limited	Limited

COVERED COMBINATION Vs CHRISTMAS TREE SPREAD WITH PUT OPTION - Strategy Pros & Cons

	COVERED COMBINATION	CHRISTMAS TREE SPREAD WITH PUT OPTION
Similar Strategies	Stock Repair Strategy	Butterfly spreads
Disadvantage	Combinations can be profitable in sideways or rising markets. Greater combined net credit increases downside protection and potential return.	• Potential profit is lower or limited.
Advantages	Limited Maximum Profit on the upside. Covered Combinations should only be traded on stocks that are bullish.	• The potential of loss is limited.