BULL PUT SPREAD	PROTECTIVE PUT
About Strategy	Bull Put Spread Option Strategy Bull Put Spread option trading strategy is used by a trader who is bullish in nature and expects the underlying asset to move in an upward trend in the near future. This strategy includes buying of an ‘Out of the Money’ Put Option and selling of ‘In the Money’ Put Option of the same underlying asset and the same expiration date. When you write a Put, you will receive prem 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..

BULL PUT SPREAD Vs PROTECTIVE PUT - Details

	BULL PUT SPREAD	PROTECTIVE PUT
Market View	Bullish	Bullish
Type (CE/PE)	PE (Put Option)	PE (Put Option)
Number Of Positions	2	1
Strategy Level	Advance	Beginners
Reward Profile	Limited	Unlimited
Risk Profile	Limited	Limited
Breakeven Point	Strike price of short put - net premium paid	Purchase Price of Underlying + Premium Paid

BULL PUT SPREAD Vs PROTECTIVE PUT - When & How to use ?

	BULL PUT SPREAD	PROTECTIVE PUT
Market View	Bullish	Bullish
When to use?	Bull Put Spread strategy is used when you're of the view that the price of a particular underlying will rise, move sideways, or marginally fall.	This strategy is adopted when a trader is long on the underlying asset but skeptical of the downside.
Action	Buy OTM Put Option, Sell ITM Put Option	Buy 1 ATM Put
Breakeven Point	Strike price of short put - net premium paid	Purchase Price of Underlying + Premium Paid

BULL PUT SPREAD Vs PROTECTIVE PUT - Risk & Reward

	BULL PUT SPREAD	PROTECTIVE PUT
Maximum Profit Scenario	Max Profit = Net Premium Received	Price of Underlying - Purchase Price of Underlying - Premium Paid
Maximum Loss Scenario	Max Loss = (Strike Price Put 1 - Strike Price of Put 2) - Net Premium Received	Premium Paid + Purchase Price of Underlying - Put Strike + Commissions Paid
Risk	Limited	Limited
Reward	Limited	Unlimited

BULL PUT SPREAD Vs PROTECTIVE PUT - Strategy Pros & Cons

	BULL PUT SPREAD	PROTECTIVE PUT
Similar Strategies	Bull Call Spread, Bear Put Spread, Collar	Long Call, Call Backspread
Disadvantage	• Limited profit potential. • In loss situations, time decay may go against you.	• 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	• Benefit from the time decay in profit positions but harmful in loss positions. • Profitable when underlying stock price rises, move sideways or marginal drop. • Reduce the downside 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.