COVERED PUT	LONG STRANGLE
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..	Long Strangle Option Strategy A Strangle is similar to Straddle. In Strangle, a trader will purchase one OTM Call Option and one OTM Put Option, of the same expiry date and the same underlying asset. This strategy will reduce the entry cost for trader and it is also cheaper than straddle. A trader will make profits, if the market moves sharply in either direction and gives extra-ordinary returns in the .. Read more..

COVERED PUT Vs LONG STRANGLE - Details

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

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

	COVERED PUT	LONG STRANGLE
Market View	Bearish	Neutral
When to use?	The Covered Put works well when the market is moderately Bearish.	This strategy is used in special scenarios where you foresee a lot of volatility in the market due to election results, budget, policy change, annual result announcements etc.
Action	Sell Underlying Sell OTM Put Option	Buy OTM Call Option, Buy OTM Put Option
Breakeven Point	Futures Price + Premium Received	Lower Breakeven Point = Strike Price of Put - Net Premium, Upper Breakeven Point = Strike Price of Call + Net Premium

COVERED PUT Vs LONG STRANGLE - Risk & Reward

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

COVERED PUT Vs LONG STRANGLE - Strategy Pros & Cons

	COVERED PUT	LONG STRANGLE
Similar Strategies	Bear Put Spread, Bear Call Spread	Long Straddle, Short Strangle
Disadvantage	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.	• Require significant price movement to book profit. • Traders can lose more money if the underlying asset stayed stagnant.
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.	• Able to book profit, no matter if the underlying asset goes in either direction. • Limited loss to the debit paid. • If the underlying asset continues to move in one direction then you can book Unlimited profit .