RISK REVERSAL	COVERED PUT
About Strategy	Risk Reversal Option Strategy This strategy protects an investor from unfavourable price movements in the position but limits the profits can be made on that position. A risk reversal is a hedging strategy that protects a long or short position by using put and call options. In this one option is buying and other is written. In this strategy the trader has to pay a premium, while the written option prod Read more..	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..

RISK REVERSAL Vs COVERED PUT - Details

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

RISK REVERSAL Vs COVERED PUT - When & How to use ?

	RISK REVERSAL	COVERED PUT
Market View	Bullish	Bearish
When to use?	This strategy can be used for hedging. When an investor want to protect long or short position by using a call and put option.	The Covered Put works well when the market is moderately Bearish.
Action	This strategy work when an investor want to hedge their position by buying a put option and selling a call option.	Sell Underlying Sell OTM Put Option
Breakeven Point	Premium received - Put Strike Price	Futures Price + Premium Received

RISK REVERSAL Vs COVERED PUT - Risk & Reward

	RISK REVERSAL	COVERED PUT
Maximum Profit Scenario	You have unlimited profit potential to the upside.	The profit happens when the price of the underlying moves above strike price of Short Put.
Maximum Loss Scenario	You have nearly unlimited downside risk as well because you are short the put	Price of Underlying - Sale Price of Underlying - Premium Received
Risk	Unlimited	Unlimited
Reward	Unlimited	Limited

RISK REVERSAL Vs COVERED PUT - Strategy Pros & Cons

	RISK REVERSAL	COVERED PUT
Similar Strategies	-	Bear Put Spread, Bear Call Spread
Disadvantage	Unlimited Risk.	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.
Advantages	Unlimited profit.	• 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.