BEAR PUT SPREAD	PROTECTIVE PUT
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..	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 Vs PROTECTIVE PUT - Details

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

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

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

BEAR PUT SPREAD Vs PROTECTIVE PUT - Risk & Reward

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

BEAR PUT SPREAD Vs PROTECTIVE PUT - Strategy Pros & Cons

	BEAR PUT SPREAD	PROTECTIVE PUT
Similar Strategies	Bear Call Spread, Bull Call Spread	Long Call, Call Backspread
Disadvantage	• Limited profit. • Early assignment risk.	• 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	• 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.	• 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.