COVERED PUT	CHRISTMAS TREE SPREAD WITH PUT OPTION
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..	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..

COVERED PUT Vs CHRISTMAS TREE SPREAD WITH PUT OPTION - Details

	COVERED PUT	CHRISTMAS TREE SPREAD WITH PUT OPTION
Market View	Bearish	Bearish
Type (CE/PE)	PE (Put Option) + Underlying	CE (Call Option)
Number Of Positions	2	6
Strategy Level	Advance	Advance
Reward Profile	Limited	Limited
Risk Profile	Unlimited	Limited
Breakeven Point	Futures Price + Premium Received	Lowest strike prices + the half premium – premium paid

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

	COVERED PUT	CHRISTMAS TREE SPREAD WITH PUT OPTION
Market View	Bearish	Bearish
When to use?	The Covered Put works well when the market is moderately Bearish.	This Strategy is used when an investor wants potential returns.
Action	Sell Underlying Sell OTM Put Option	Buying one ATM, Selling 3 Puts, Buying one more OTM Put
Breakeven Point	Futures Price + Premium Received	Lowest strike prices + the half premium – premium paid

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

	COVERED PUT	CHRISTMAS TREE SPREAD WITH PUT OPTION
Maximum Profit Scenario	The profit happens when the price of the underlying moves above strike price of Short Put.	Equal middle strike price – higher strike price – the premium
Maximum Loss Scenario	Price of Underlying - Sale Price of Underlying - Premium Received	Net Debit paid for the strategy.
Risk	Unlimited	Limited
Reward	Limited	Limited

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

	COVERED PUT	CHRISTMAS TREE SPREAD WITH PUT OPTION
Similar Strategies	Bear Put Spread, Bear Call Spread	Butterfly spreads
Disadvantage	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.	• Potential profit is lower or limited.
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.	• The potential of loss is limited.