Compare Strategies
LONG PUT | MARRIED PUT | |
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About Strategy |
Long Put Option StrategyThis strategy is implemented by buying 1 Put Option i.e. a single position, when the person is bearish on the market and expects the market to move downwards in the near future. |
Married Put Option StrategyThis strategy is applied when trader goes long on the underlying asset i.e. he buys the stock in cash market. He has a bullish view and expects the market to rise in the near future, but simultaneously has the fear of downward movement of the markets. In order to cover his position from vulnerabilities he buys one ATM Put Option of the same underlying asset. Here, a trader wi .. |
LONG PUT Vs MARRIED PUT - Details
LONG PUT | MARRIED PUT | |
---|---|---|
Market View | Bearish | Bullish |
Type (CE/PE) | PE (Put Option) | PE (Put Option) |
Number Of Positions | 1 | 1 |
Strategy Level | Beginners | Beginners |
Reward Profile | Unlimited | Unlimited |
Risk Profile | Limited | Limited |
Breakeven Point | Strike Price of Long Put - Premium Paid | Purchase Price of Underlying + Premium Paid |
LONG PUT Vs MARRIED PUT - When & How to use ?
LONG PUT | MARRIED PUT | |
---|---|---|
Market View | Bearish | Bullish |
When to use? | A long put option strategy works well when you're expecting the underlying asset to sharply decline or be volatile in near future. | This Strategy work when the investor goes long in any stock. He expects the rise in market in future. |
Action | Buy Put Option | Buy 250 XYZ Shares, Buy 1 ATM Put Option |
Breakeven Point | Strike Price of Long Put - Premium Paid | Purchase Price of Underlying + Premium Paid |
LONG PUT Vs MARRIED PUT - Risk & Reward
LONG PUT | MARRIED PUT | |
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Maximum Profit Scenario | Profit = Strike Price of Long Put - Premium Paid | Profit = Price of Underlying - Purchase Price of Underlying - Premium Paid |
Maximum Loss Scenario | Max Loss = Premium Paid + Commissions Paid | Max Loss = Premium Paid + Commissions Paid |
Risk | Limited | Limited |
Reward | Unlimited | Unlimited |
LONG PUT Vs MARRIED PUT - Strategy Pros & Cons
LONG PUT | MARRIED PUT | |
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Similar Strategies | Protective Call, Short Put | Long Call |
Disadvantage | • 100% loss if strike price, expiration dates or underlying stocks are badly chosen. • Time decay. | Cost of the put options eats into profit margin. |
Advantages | • Limited risk to the premium paid. • Less capital investment and more profit. • Unlimited profit potential with limited risk. | Unlimited Profit and Limited Risk |