COVERED PUT	STRAP
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..	Strap Option Strategy  Strap Strategy is similar to Long Straddle, the only difference is the quantity traded. A trader will buy two Call Options and one Put Options. In this strategy, a trader is very bullish on the market and volatility on upside but wants to hedge himself in case the stock doesn’t perform as per his expectations. This strategy will make more profits compared to long straddle sin .. Read more..

COVERED PUT Vs STRAP - Details

	COVERED PUT	STRAP
Market View	Bearish	Neutral
Type (CE/PE)	PE (Put Option) + Underlying	CE (Call Option) + PE (Put Option)
Number Of Positions	2	3
Strategy Level	Advance	Beginners
Reward Profile	Limited	Profit Achieved When Price of Underlying > Strike Price of Calls/Puts + (Net Premium Paid/2) OR Price of Underlying < Strike Price of Calls/Puts - Net Premium Paid
Risk Profile	Unlimited	Max Loss Occurs When Price of Underlying = Strike Price of Calls/Puts
Breakeven Point	Futures Price + Premium Received	Strike Price of Calls/Puts + (Net Premium Paid/2)

COVERED PUT Vs STRAP - When & How to use ?

	COVERED PUT	STRAP
Market View	Bearish	Neutral
When to use?	The Covered Put works well when the market is moderately Bearish.	This strategy is used when the investor is bullish on the stock and expects volatility in the near future.
Action	Sell Underlying Sell OTM Put Option	Buy 2 ATM Call Option, Buy 1 ATM Put Option
Breakeven Point	Futures Price + Premium Received	Strike Price of Calls/Puts + (Net Premium Paid/2)

COVERED PUT Vs STRAP - Risk & Reward

	COVERED PUT	STRAP
Maximum Profit Scenario	The profit happens when the price of the underlying moves above strike price of Short Put.	UNLIMITED
Maximum Loss Scenario	Price of Underlying - Sale Price of Underlying - Premium Received	Net Premium Paid
Risk	Unlimited	Limited
Reward	Limited	Unlimited

COVERED PUT Vs STRAP - Strategy Pros & Cons

	COVERED PUT	STRAP
Similar Strategies	Bear Put Spread, Bear Call Spread	Strip, Short Put Ladder, Short Call Ladder
Disadvantage	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.	• To generate profit, there should be significant change in share price. • Expensive strategy.
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 loss. • If share prices are moving then traders can book unlimited profit. • A trader can still book profit if the underlying falls substantially.