LONG PUT	PROTECTIVE PUT
About Strategy	Long Put Option Strategy This strategy is implemented by buying 1 Put Option i.e. a single position, when the person is bearish on the market and expects the market to move downwards in the near future. Risk: The maximum loss will be the premium amount paid.< 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..

LONG PUT Vs PROTECTIVE PUT - Details

	LONG PUT	PROTECTIVE PUT
Market View	Bearish	Bullish
Type (CE/PE)	PE (Put Option)	PE (Put Option)
Number Of Positions	1	1
Strategy Level	Beginners	Beginners
Reward Profile	Unlimited	Unlimited
Risk Profile	Limited	Limited
Breakeven Point	Strike Price of Long Put - Premium Paid	Purchase Price of Underlying + Premium Paid

LONG PUT Vs PROTECTIVE PUT - When & How to use ?

	LONG PUT	PROTECTIVE PUT
Market View	Bearish	Bullish
When to use?	A long put option strategy works well when you're expecting the underlying asset to sharply decline or be volatile in near future.	This strategy is adopted when a trader is long on the underlying asset but skeptical of the downside.
Action	Buy Put Option	Buy 1 ATM Put
Breakeven Point	Strike Price of Long Put - Premium Paid	Purchase Price of Underlying + Premium Paid

LONG PUT Vs PROTECTIVE PUT - Risk & Reward

	LONG PUT	PROTECTIVE PUT
Maximum Profit Scenario	Profit = Strike Price of Long Put - Premium Paid	Price of Underlying - Purchase Price of Underlying - Premium Paid
Maximum Loss Scenario	Max Loss = Premium Paid + Commissions Paid	Premium Paid + Purchase Price of Underlying - Put Strike + Commissions Paid
Risk	Limited	Limited
Reward	Unlimited	Unlimited

LONG PUT Vs PROTECTIVE PUT - Strategy Pros & Cons

	LONG PUT	PROTECTIVE PUT
Similar Strategies	Protective Call, Short Put	Long Call, Call Backspread
Disadvantage	• 100% loss if strike price, expiration dates or underlying stocks are badly chosen. • Time decay.	• 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	• Limited risk to the premium paid. • Less capital investment and more profit. • Unlimited profit potential with limited risk.	• 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.