LONG STRADDLE	PROTECTIVE PUT
About Strategy	Long Straddle Option Strategy  Straddle is neither bullish nor bearish strategy; it is a market neutral strategy. Here a trader wishes to take advantage of the volatility in the market. This strategy involves buying of one Call option and one Put option of the same strike price, same expiry date and of the same underlying asset. Now a trader is bound to make profits once stock moves in either direc Read more..	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..

LONG STRADDLE Vs PROTECTIVE PUT - Details

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

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

	LONG STRADDLE	PROTECTIVE PUT
Market View	Neutral	Bullish
When to use?	This options strategy is work well when and investor market view is bearish. The strategy minimizes your risk in the event of prime movements going against your expectations.	This strategy is adopted when a trader is long on the underlying asset but skeptical of the downside.
Action	Buy Call Option, Buy Put Option	Buy 1 ATM Put
Breakeven Point	Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call + Net Premium	Purchase Price of Underlying + Premium Paid

LONG STRADDLE Vs PROTECTIVE PUT - Risk & Reward

	LONG STRADDLE	PROTECTIVE PUT
Maximum Profit Scenario	Max profit is achieved when at one option is exercised.	Price of Underlying - Purchase Price of Underlying - Premium Paid
Maximum Loss Scenario	Maximum Loss = Net Premium Paid	Premium Paid + Purchase Price of Underlying - Put Strike + Commissions Paid
Risk	Limited	Limited
Reward	Unlimited	Unlimited

LONG STRADDLE Vs PROTECTIVE PUT - Strategy Pros & Cons

	LONG STRADDLE	PROTECTIVE PUT
Similar Strategies	Bear Put Spread	Long Call, Call Backspread
Disadvantage	• There should be continuous movement of the stock and options price for this strategy to be profitable. • Time decay hurts long option if the strike price, expiration date or underlying stock are badly chosen.	• 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.
Advantages	• Unlimited potential beyond the breakeven point in either direction . • Book your profit from highly volatile stocks without determining the direction. • Limited risk, more profit.	• 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.