COVERED PUT	STRIP
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..	Strip Option Strategy Strip Strategy is the opposite of Strap Strategy. When a trader is bearish on the market and bullish on volatility then he will implement this strategy by buying two ATM Put Options & one ATM Call Option, of the same strike price, expiry date & underlying asset. If the prices move downwards then this strategy will make more profits compared to short straddle because of the .. Read more..

COVERED PUT Vs STRIP - Details

	COVERED PUT	STRIP
Market View	Bearish	Neutral
Type (CE/PE)	PE (Put Option) + Underlying	CE (Call Option) + PE (Put Option)
Number Of Positions	2	3
Strategy Level	Advance	Beginners
Reward Profile	Limited	Unlimited
Risk Profile	Unlimited	Limited
Breakeven Point	Futures Price + Premium Received	Upper Breakeven Point = Strike Price of Calls/Puts + Net Premium Paid, Lower Breakeven Point = Strike Price of Calls/Puts - (Net Premium Paid/2)

COVERED PUT Vs STRIP - When & How to use ?

	COVERED PUT	STRIP
Market View	Bearish	Neutral
When to use?	The Covered Put works well when the market is moderately Bearish.	When a trader is bearish on the market and bullish on volatility then he will implement this strategy.
Action	Sell Underlying Sell OTM Put Option	Buy 1 ATM Call, Buy 2 ATM Puts
Breakeven Point	Futures Price + Premium Received	Upper Breakeven Point = Strike Price of Calls/Puts + Net Premium Paid, Lower Breakeven Point = Strike Price of Calls/Puts - (Net Premium Paid/2)

COVERED PUT Vs STRIP - Risk & Reward

	COVERED PUT	STRIP
Maximum Profit Scenario	The profit happens when the price of the underlying moves above strike price of Short Put.	Price of Underlying - Strike Price of Calls - Net Premium Paid OR 2 x (Strike Price of Puts - Price of Underlying) - Net Premium Paid
Maximum Loss Scenario	Price of Underlying - Sale Price of Underlying - Premium Received	Net Premium Paid + Commissions Paid
Risk	Unlimited	Limited
Reward	Limited	Unlimited

COVERED PUT Vs STRIP - Strategy Pros & Cons

	COVERED PUT	STRIP
Similar Strategies	Bear Put Spread, Bear Call Spread	Strap, Short Put Ladder
Disadvantage	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.	Expensive., The share price must change significantly to generate profit., High Bid/Offer spread can have a negative influence on the position.
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.	Profit is generated when the share price changes in any direction., Limited loss., The profit is potentially unlimited when share prices are moving.