COVERED PUT	LONG PUT
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..	Long Put Option Strategy This 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. Risk: The maximum loss will be the premium amount paid.< .. Read more..

COVERED PUT Vs LONG PUT - Details

	COVERED PUT	LONG PUT
Market View	Bearish	Bearish
Type (CE/PE)	PE (Put Option) + Underlying	PE (Put Option)
Number Of Positions	2	1
Strategy Level	Advance	Beginners
Reward Profile	Limited	Unlimited
Risk Profile	Unlimited	Limited
Breakeven Point	Futures Price + Premium Received	Strike Price of Long Put - Premium Paid

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

	COVERED PUT	LONG PUT
Market View	Bearish	Bearish
When to use?	The Covered Put works well when the market is moderately Bearish.	A long put option strategy works well when you're expecting the underlying asset to sharply decline or be volatile in near future.
Action	Sell Underlying Sell OTM Put Option	Buy Put Option
Breakeven Point	Futures Price + Premium Received	Strike Price of Long Put - Premium Paid

COVERED PUT Vs LONG PUT - Risk & Reward

	COVERED PUT	LONG PUT
Maximum Profit Scenario	The profit happens when the price of the underlying moves above strike price of Short Put.	Profit = Strike Price of Long Put - Premium Paid
Maximum Loss Scenario	Price of Underlying - Sale Price of Underlying - Premium Received	Max Loss = Premium Paid + Commissions Paid
Risk	Unlimited	Limited
Reward	Limited	Unlimited

COVERED PUT Vs LONG PUT - Strategy Pros & Cons

	COVERED PUT	LONG PUT
Similar Strategies	Bear Put Spread, Bear Call Spread	Protective Call, Short Put
Disadvantage	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.	• 100% loss if strike price, expiration dates or underlying stocks are badly chosen. • Time decay.
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 risk to the premium paid. • Less capital investment and more profit. • Unlimited profit potential with limited risk.