COVERED PUT	COVERED COMBINATION
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..	Covered Combination Option Strategy This strategy involves selling OTM Call & Put Options and buying the underlying asset in either cash or futures market. It is also known as Covered Strangle as the profits are capped and risk is potentially unlimited. Risk: Un .. Read more..

COVERED PUT Vs COVERED COMBINATION - Details

	COVERED PUT	COVERED COMBINATION
Market View	Bearish	Bullish
Type (CE/PE)	PE (Put Option) + Underlying	CE (Call Option) + PE (Put Option)
Number Of Positions	2	2
Strategy Level	Advance	Advance
Reward Profile	Limited	Limited
Risk Profile	Unlimited	Unlimited
Breakeven Point	Futures Price + Premium Received	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

COVERED PUT Vs COVERED COMBINATION - When & How to use ?

	COVERED PUT	COVERED COMBINATION
Market View	Bearish	Bullish
When to use?	The Covered Put works well when the market is moderately Bearish.	This strategy is mainly suited for investors who are moderately bullish on a stock and are comfortable with increasing their position in the event of a price decline.
Action	Sell Underlying Sell OTM Put Option	Sell 1 OTM Call, Sell 1 OTM Put
Breakeven Point	Futures Price + Premium Received	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

COVERED PUT Vs COVERED COMBINATION - Risk & Reward

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

COVERED PUT Vs COVERED COMBINATION - Strategy Pros & Cons

	COVERED PUT	COVERED COMBINATION
Similar Strategies	Bear Put Spread, Bear Call Spread	Stock Repair Strategy
Disadvantage	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.	Combinations can be profitable in sideways or rising markets. Greater combined net credit increases downside protection and potential return.
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.	Limited Maximum Profit on the upside. Covered Combinations should only be traded on stocks that are bullish.