COVERED PUT	SHORT STRANGLE
About Strategy	Covered Put Option Strategy  This strategy is exactly opposite to Covered Call Strategy. Here the investor is neutral or moderately bearish in nature and wants to take advantage of the price fall in the near future. The trader will short one lot of stock future. Now the trader will short ATM Put Option, the option strike price will be his exit price. If the prices rally above the strike price, the Read more..	Short Strangle Option Strategy  This strategy is similar to Short Straddle; the only difference is of the strike prices at which the positions are built. Short Strangle involves selling of one OTM Call Option and selling of one OTM Put Option, of the same expiry date and same underlying asset. Here the probability of making profits is more as there is a spread between the two strike prices, and if .. Read more..

COVERED PUT Vs SHORT STRANGLE - Details

	COVERED PUT	SHORT STRANGLE
Market View	Bearish	Neutral
Type (CE/PE)	PE (Put Option) + Underlying	CE (Call Option) + PE (Put Option)
Number Of Positions	2	2
Strategy Level	Advance	Advance
Reward Profile	Limited	Limited
Risk Profile	Unlimited	Unlimited
Breakeven Point	Futures Price + Premium Received	Lower Break-even = Strike Price of Put - Net Premium, Upper Break-even = Strike Price of Call+ Net Premium

COVERED PUT Vs SHORT STRANGLE - When & How to use ?

	COVERED PUT	SHORT STRANGLE
Market View	Bearish	Neutral
When to use?	The Covered Put works well when the market is moderately Bearish.	This strategy is perfect in a neutral market scenario when the underlying is expected to be less volatile.
Action	Sell Underlying Sell OTM Put Option	Sell OTM Call, Sell OTM Put
Breakeven Point	Futures Price + Premium Received	Lower Break-even = Strike Price of Put - Net Premium, Upper Break-even = Strike Price of Call+ Net Premium

COVERED PUT Vs SHORT STRANGLE - Risk & Reward

	COVERED PUT	SHORT STRANGLE
Maximum Profit Scenario	The profit happens when the price of the underlying moves above strike price of Short Put.	Maximum Profit = Net Premium Received
Maximum Loss Scenario	Price of Underlying - Sale Price of Underlying - Premium Received	Loss = Price of Underlying - Strike Price of Short Call - Net Premium Received
Risk	Unlimited	Unlimited
Reward	Limited	Limited

COVERED PUT Vs SHORT STRANGLE - Strategy Pros & Cons

	COVERED PUT	SHORT STRANGLE
Similar Strategies	Bear Put Spread, Bear Call Spread	Short Straddle, Long Strangle
Disadvantage	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.	• Unlimited loss is associated with this strategy, not recommended for beginners. • Limited reward amount.
Advantages	• Investors can book profit when underlying stock price drop, move sideways or rises by a small amount. • Able to generate monthly income. • Able to generate profit from fall in prices or mild increase in the prices.	• Higher chance of profitability due to selling of OTM options. • Advantage from double time decay and a contraction in volatility. • Traders can book profit when underlying asset stays within a tight trading range.