PROTECTIVE PUT	CHRISTMAS TREE SPREAD WITH PUT OPTION
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..	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..

PROTECTIVE PUT Vs CHRISTMAS TREE SPREAD WITH PUT OPTION - Details

	PROTECTIVE PUT	CHRISTMAS TREE SPREAD WITH PUT OPTION
Market View	Bullish	Bearish
Type (CE/PE)	PE (Put Option)	CE (Call Option)
Number Of Positions	1	6
Strategy Level	Beginners	Advance
Reward Profile	Unlimited	Limited
Risk Profile	Limited	Limited
Breakeven Point	Purchase Price of Underlying + Premium Paid	Lowest strike prices + the half premium – premium paid

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

	PROTECTIVE PUT	CHRISTMAS TREE SPREAD WITH PUT OPTION
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.	This Strategy is used when an investor wants potential returns.
Action	Buy 1 ATM Put	Buying one ATM, Selling 3 Puts, Buying one more OTM Put
Breakeven Point	Purchase Price of Underlying + Premium Paid	Lowest strike prices + the half premium – premium paid

PROTECTIVE PUT Vs CHRISTMAS TREE SPREAD WITH PUT OPTION - Risk & Reward

	PROTECTIVE PUT	CHRISTMAS TREE SPREAD WITH PUT OPTION
Maximum Profit Scenario	Price of Underlying - Purchase Price of Underlying - Premium Paid	Equal middle strike price – higher strike price – the premium
Maximum Loss Scenario	Premium Paid + Purchase Price of Underlying - Put Strike + Commissions Paid	Net Debit paid for the strategy.
Risk	Limited	Limited
Reward	Unlimited	Limited

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

	PROTECTIVE PUT	CHRISTMAS TREE SPREAD WITH PUT OPTION
Similar Strategies	Long Call, Call Backspread	Butterfly spreads
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.	• Potential profit is lower or limited.
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.	• The potential of loss is limited.