PROTECTIVE PUT	LONG PUT LADDER
About Strategy	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 Ladder Option Strategy  Long Put Ladder can be implemented when a trader is slightly bearish on the market and volatility. It involves buying of an ITM Put Option and sale of 1 ATM & 1 OTM Put Options. However, the risk associated with this strategy is unlimited and reward is limited. Risk:< .. Read more..

PROTECTIVE PUT Vs LONG PUT LADDER - Details

	PROTECTIVE PUT	LONG PUT LADDER
Market View	Bullish	Neutral
Type (CE/PE)	PE (Put Option)	PE (Put Option)
Number Of Positions	1	3
Strategy Level	Beginners	Advance
Reward Profile	Unlimited	Limited
Risk Profile	Limited	Unlimited
Breakeven Point	Purchase Price of Underlying + Premium Paid	Upper Breakeven Point = Strike Price of Long Put - Net Premium Paid, Lower Breakeven Point = Total Strike Prices of Short Puts - Strike Price of Long Put + Net Premium Paid

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

	PROTECTIVE PUT	LONG PUT LADDER
Market View	Bullish	Neutral
When to use?	This strategy is adopted when a trader is long on the underlying asset but skeptical of the downside.	This Strategy can be implemented when a trader is slightly bearish on the market and volatility.
Action	Buy 1 ATM Put	Buy 1 ITM Put, Sell 1 ATM Put, Sell 1 OTM Put
Breakeven Point	Purchase Price of Underlying + Premium Paid	Upper Breakeven Point = Strike Price of Long Put - Net Premium Paid, Lower Breakeven Point = Total Strike Prices of Short Puts - Strike Price of Long Put + Net Premium Paid

PROTECTIVE PUT Vs LONG PUT LADDER - Risk & Reward

	PROTECTIVE PUT	LONG PUT LADDER
Maximum Profit Scenario	Price of Underlying - Purchase Price of Underlying - Premium Paid	Strike Price of Long Put - Strike Price of Higher Strike Short Put - Net Premium Paid - Commissions Paid
Maximum Loss Scenario	Premium Paid + Purchase Price of Underlying - Put Strike + Commissions Paid	When Price of Underlying < Total Strike Prices of Short Puts - Strike Price of Long Put + Net Premium Paid
Risk	Limited	Unlimited
Reward	Unlimited	Limited

PROTECTIVE PUT Vs LONG PUT LADDER - Strategy Pros & Cons

	PROTECTIVE PUT	LONG PUT LADDER
Similar Strategies	Long Call, Call Backspread	Short Strangle (Sell Strangle), Short Straddle (Sell Straddle)
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.	• Unlimited risk. • Margin required.
Advantages	• 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.	• Reduces capital outlay of bear put spread. • Wider maximum profit zone. • When there is decrease in implied volatility, this strategy can give profit.