PROTECTIVE PUT	SHORT STRADDLE
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..	Short Straddle Option strategy This strategy is just the opposite of Long Straddle. A trader should adopt this strategy when he expects less volatility in the near future. Here, a trader will sell one Call Option & one Put Option of the same strike price, same expiry date and of the same underlying asset. If the stock/index hovers around the same levels then both the options will expire worthless an .. Read more..

PROTECTIVE PUT Vs SHORT STRADDLE - Details

	PROTECTIVE PUT	SHORT STRADDLE
Market View	Bullish	Neutral
Type (CE/PE)	PE (Put Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	1	2
Strategy Level	Beginners	Advance
Reward Profile	Unlimited	Limited
Risk Profile	Limited	Unlimited
Breakeven Point	Purchase Price of Underlying + Premium Paid	Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call+ Net Premium

PROTECTIVE PUT Vs SHORT STRADDLE - When & How to use ?

	PROTECTIVE PUT	SHORT STRADDLE
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 is work well when an investor expect a flat market in the coming days with very less movement in the prices of underlying asset.
Action	Buy 1 ATM Put	Sell Call Option, Sell Put Option
Breakeven Point	Purchase Price of Underlying + Premium Paid	Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call+ Net Premium

PROTECTIVE PUT Vs SHORT STRADDLE - Risk & Reward

	PROTECTIVE PUT	SHORT STRADDLE
Maximum Profit Scenario	Price of Underlying - Purchase Price of Underlying - Premium Paid	Max Profit = Net Premium Received - Commissions Paid
Maximum Loss Scenario	Premium Paid + Purchase Price of Underlying - Put Strike + Commissions Paid	Maximum Loss = Long Call Strike Price - Short Call Strike Price - Net Premium Received
Risk	Limited	Unlimited
Reward	Unlimited	Limited

PROTECTIVE PUT Vs SHORT STRADDLE - Strategy Pros & Cons

	PROTECTIVE PUT	SHORT STRADDLE
Similar Strategies	Long Call, Call Backspread	Short Strangle
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. • If the price of the underlying asset moves in either direction then huge losses can occur.
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.	• A trader can earn profit even when there is no volatility in the market . • Allows you to benefit from double time decay. • Trader can collect premium from puts and calls option .