CALL BACKSPREAD	PROTECTIVE PUT
About Strategy	Call Backspread Option Trading  This strategy is adopted by traders who are bullish in nature. He expects market and volatility to rise in the near future. A trader need not be direction specific here (i.e. an upward or downward trend, but a small bias towards an uptrend should always be present, as the gains will be much higher once the market moves up r 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..

CALL BACKSPREAD Vs PROTECTIVE PUT - Details

	CALL BACKSPREAD	PROTECTIVE PUT
Market View	Bullish	Bullish
Type (CE/PE)	CE (Call Option)	PE (Put Option)
Number Of Positions	3	1
Strategy Level	Advance	Beginners
Reward Profile	Unlimited	Unlimited
Risk Profile	Limited	Limited
Breakeven Point	Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss	Purchase Price of Underlying + Premium Paid

CALL BACKSPREAD Vs PROTECTIVE PUT - When & How to use ?

	CALL BACKSPREAD	PROTECTIVE PUT
Market View	Bullish	Bullish
When to use?	This strategy is used when the investor expects the price of the stock to rise in the future.	This strategy is adopted when a trader is long on the underlying asset but skeptical of the downside.
Action	Sell 1 ITM Call, BUY 2 OTM Call	Buy 1 ATM Put
Breakeven Point	Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss	Purchase Price of Underlying + Premium Paid

CALL BACKSPREAD Vs PROTECTIVE PUT - Risk & Reward

	CALL BACKSPREAD	PROTECTIVE PUT
Maximum Profit Scenario	Unlimited profit potential if the stock goes in upward direction.	Price of Underlying - Purchase Price of Underlying - Premium Paid
Maximum Loss Scenario	Strike Price of long call - Strike Price of short call - Net premium received	Premium Paid + Purchase Price of Underlying - Put Strike + Commissions Paid
Risk	Limited	Limited
Reward	Unlimited	Unlimited

CALL BACKSPREAD Vs PROTECTIVE PUT - Strategy Pros & Cons

	CALL BACKSPREAD	PROTECTIVE PUT
Similar Strategies	-	Long Call, Call Backspread
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.
Advantages	• Unlimited profit potential.	• 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.