STRIP	COVERED PUT
About Strategy	Strip Option Strategy Strip Strategy is the opposite of Strap Strategy. When a trader is bearish on the market and bullish on volatility then he will implement this strategy by buying two ATM Put Options & one ATM Call Option, of the same strike price, expiry date & underlying asset. If the prices move downwards then this strategy will make more profits compared to short straddle because of the 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..

STRIP Vs COVERED PUT - Details

	STRIP	COVERED PUT
Market View	Neutral	Bearish
Type (CE/PE)	CE (Call Option) + PE (Put Option)	PE (Put Option) + Underlying
Number Of Positions	3	2
Strategy Level	Beginners	Advance
Reward Profile	Unlimited	Limited
Risk Profile	Limited	Unlimited
Breakeven Point	Upper Breakeven Point = Strike Price of Calls/Puts + Net Premium Paid, Lower Breakeven Point = Strike Price of Calls/Puts - (Net Premium Paid/2)	Futures Price + Premium Received

STRIP Vs COVERED PUT - When & How to use ?

	STRIP	COVERED PUT
Market View	Neutral	Bearish
When to use?	When a trader is bearish on the market and bullish on volatility then he will implement this strategy.	The Covered Put works well when the market is moderately Bearish.
Action	Buy 1 ATM Call, Buy 2 ATM Puts	Sell Underlying Sell OTM Put Option
Breakeven Point	Upper Breakeven Point = Strike Price of Calls/Puts + Net Premium Paid, Lower Breakeven Point = Strike Price of Calls/Puts - (Net Premium Paid/2)	Futures Price + Premium Received

STRIP Vs COVERED PUT - Risk & Reward

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

STRIP Vs COVERED PUT - Strategy Pros & Cons

	STRIP	COVERED PUT
Similar Strategies	Strap, Short Put Ladder	Bear Put Spread, Bear Call Spread
Disadvantage	Expensive., The share price must change significantly to generate profit., High Bid/Offer spread can have a negative influence on the position.	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.
Advantages	Profit is generated when the share price changes in any direction., Limited loss., The profit is potentially unlimited when share prices are moving.	• 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.