SHORT STRANGLE	COVERED PUT
About Strategy	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 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 Vs COVERED PUT - Details

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

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

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

SHORT STRANGLE Vs COVERED PUT - Risk & Reward

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

SHORT STRANGLE Vs COVERED PUT - Strategy Pros & Cons

	SHORT STRANGLE	COVERED PUT
Similar Strategies	Short Straddle, Long Strangle	Bear Put Spread, Bear Call Spread
Disadvantage	• Unlimited loss is associated with this strategy, not recommended for beginners. • Limited reward amount.	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.
Advantages	• 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.	• 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.