SHORT PUT	PROTECTIVE PUT
About Strategy	Short Put Option Strategy A trader will short put if he is bullish in nature and expects the underlying asset not to fall below a certain level. Risk: Losses will be potentially unlimited if the stock skyrockets above the strike price of put. Read more..	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..

SHORT PUT Vs PROTECTIVE PUT - Details

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

SHORT PUT Vs PROTECTIVE PUT - When & How to use ?

	SHORT PUT	PROTECTIVE PUT
Market View	Bullish	Bullish
When to use?	This strategy works well when you're Bullish that the price of the underlying will not fall beyond a certain level.	This strategy is adopted when a trader is long on the underlying asset but skeptical of the downside.
Action	Sell Put Option	Buy 1 ATM Put
Breakeven Point	Strike Price - Premium	Purchase Price of Underlying + Premium Paid

SHORT PUT Vs PROTECTIVE PUT - Risk & Reward

	SHORT PUT	PROTECTIVE PUT
Maximum Profit Scenario	Premium received in your account when you sell the Put Option.	Price of Underlying - Purchase Price of Underlying - Premium Paid
Maximum Loss Scenario	Unlimited (When the price of the underlying falls.)	Premium Paid + Purchase Price of Underlying - Put Strike + Commissions Paid
Risk	Unlimited	Limited
Reward	Limited	Unlimited

SHORT PUT Vs PROTECTIVE PUT - Strategy Pros & Cons

	SHORT PUT	PROTECTIVE PUT
Similar Strategies	Bull Put Spread, Short Starddle	Long Call, Call Backspread
Disadvantage	• Unlimited risk. • Huge losses if the price of the underlying stock falls steeply.	• 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.
Advantages	• Benefit from time decay. • Less capital required than buying the stock outright. • Profit when underlying stock price rise, move sideways or drop by a relatively small account.	• 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.