Compare Strategies
BULL PUT SPREAD | MARRIED PUT | |
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About Strategy |
Bull Put Spread Option StrategyBull Put Spread option trading strategy is used by a trader who is bullish in nature and expects the underlying asset to move in an upward trend in the near future. This strategy includes buying of an ‘Out of the Money’ Put Option and selling of ‘In the Money’ Put Option of the same underlying asset and the same expiration date. When you write a Put, you will receive prem |
Married Put Option StrategyThis strategy is applied when trader goes long on the underlying asset i.e. he buys the stock in cash market. He has a bullish view and expects the market to rise in the near future, but simultaneously has the fear of downward movement of the markets. In order to cover his position from vulnerabilities he buys one ATM Put Option of the same underlying asset. Here, a trader wi .. |
BULL PUT SPREAD Vs MARRIED PUT - Details
BULL PUT SPREAD | MARRIED PUT | |
---|---|---|
Market View | Bullish | Bullish |
Type (CE/PE) | PE (Put Option) | PE (Put Option) |
Number Of Positions | 2 | 1 |
Strategy Level | Advance | Beginners |
Reward Profile | Limited | Unlimited |
Risk Profile | Limited | Limited |
Breakeven Point | Strike price of short put - net premium paid | Purchase Price of Underlying + Premium Paid |
BULL PUT SPREAD Vs MARRIED PUT - When & How to use ?
BULL PUT SPREAD | MARRIED PUT | |
---|---|---|
Market View | Bullish | Bullish |
When to use? | Bull Put Spread strategy is used when you're of the view that the price of a particular underlying will rise, move sideways, or marginally fall. | This Strategy work when the investor goes long in any stock. He expects the rise in market in future. |
Action | Buy OTM Put Option, Sell ITM Put Option | Buy 250 XYZ Shares, Buy 1 ATM Put Option |
Breakeven Point | Strike price of short put - net premium paid | Purchase Price of Underlying + Premium Paid |
BULL PUT SPREAD Vs MARRIED PUT - Risk & Reward
BULL PUT SPREAD | MARRIED PUT | |
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Maximum Profit Scenario | Max Profit = Net Premium Received | Profit = Price of Underlying - Purchase Price of Underlying - Premium Paid |
Maximum Loss Scenario | Max Loss = (Strike Price Put 1 - Strike Price of Put 2) - Net Premium Received | Max Loss = Premium Paid + Commissions Paid |
Risk | Limited | Limited |
Reward | Limited | Unlimited |
BULL PUT SPREAD Vs MARRIED PUT - Strategy Pros & Cons
BULL PUT SPREAD | MARRIED PUT | |
---|---|---|
Similar Strategies | Bull Call Spread, Bear Put Spread, Collar | Long Call |
Disadvantage | • Limited profit potential. • In loss situations, time decay may go against you. | Cost of the put options eats into profit margin. |
Advantages | • Benefit from the time decay in profit positions but harmful in loss positions. • Profitable when underlying stock price rises, move sideways or marginal drop. • Reduce the downside risk. | Unlimited Profit and Limited Risk |