BULL PUT SPREAD	COVERED COMBINATION
About Strategy	Bull Put Spread Option Strategy Bull Put Spread option trading strategy is used by a trader who is bullish in nature and expects the underlying asset to move in an upward trend in the near future. This strategy includes buying of an ‘Out of the Money’ Put Option and selling of ‘In the Money’ Put Option of the same underlying asset and the same expiration date. When you write a Put, you will receive prem Read more..	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..

BULL PUT SPREAD Vs COVERED COMBINATION - Details

	BULL PUT SPREAD	COVERED COMBINATION
Market View	Bullish	Bullish
Type (CE/PE)	PE (Put Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	2	2
Strategy Level	Advance	Advance
Reward Profile	Limited	Limited
Risk Profile	Limited	Unlimited
Breakeven Point	Strike price of short put - net premium paid	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

BULL PUT SPREAD Vs COVERED COMBINATION - When & How to use ?

	BULL PUT SPREAD	COVERED COMBINATION
Market View	Bullish	Bullish
When to use?	Bull Put Spread strategy is used when you're of the view that the price of a particular underlying will rise, move sideways, or marginally fall.	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.
Action	Buy OTM Put Option, Sell ITM Put Option	Sell 1 OTM Call, Sell 1 OTM Put
Breakeven Point	Strike price of short put - net premium paid	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

BULL PUT SPREAD Vs COVERED COMBINATION - Risk & Reward

	BULL PUT SPREAD	COVERED COMBINATION
Maximum Profit Scenario	Max Profit = Net Premium Received	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received - Commissions Paid
Maximum Loss Scenario	Max Loss = (Strike Price Put 1 - Strike Price of Put 2) - Net Premium Received	Purchase Price of Underlying + Strike Price of Short Put - (2 x Price of Underlying) - Max Profit + Commissions Paid
Risk	Limited	Unlimited
Reward	Limited	Limited

BULL PUT SPREAD Vs COVERED COMBINATION - Strategy Pros & Cons

	BULL PUT SPREAD	COVERED COMBINATION
Similar Strategies	Bull Call Spread, Bear Put Spread, Collar	Stock Repair Strategy
Disadvantage	• Limited profit potential. • In loss situations, time decay may go against you.	Combinations can be profitable in sideways or rising markets. Greater combined net credit increases downside protection and potential return.
Advantages	• Benefit from the time decay in profit positions but harmful in loss positions. • Profitable when underlying stock price rises, move sideways or marginal drop. • Reduce the downside risk.	Limited Maximum Profit on the upside. Covered Combinations should only be traded on stocks that are bullish.