LONG PUT	COVERED PUT
About Strategy	Long Put Option Strategy This strategy is implemented by buying 1 Put Option i.e. a single position, when the person is bearish on the market and expects the market to move downwards in the near future. Risk: The maximum loss will be the premium amount paid.< 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..

LONG PUT Vs COVERED PUT - Details

	LONG PUT	COVERED PUT
Market View	Bearish	Bearish
Type (CE/PE)	PE (Put Option)	PE (Put Option) + Underlying
Number Of Positions	1	2
Strategy Level	Beginners	Advance
Reward Profile	Unlimited	Limited
Risk Profile	Limited	Unlimited
Breakeven Point	Strike Price of Long Put - Premium Paid	Futures Price + Premium Received

LONG PUT Vs COVERED PUT - When & How to use ?

	LONG PUT	COVERED PUT
Market View	Bearish	Bearish
When to use?	A long put option strategy works well when you're expecting the underlying asset to sharply decline or be volatile in near future.	The Covered Put works well when the market is moderately Bearish.
Action	Buy Put Option	Sell Underlying Sell OTM Put Option
Breakeven Point	Strike Price of Long Put - Premium Paid	Futures Price + Premium Received

LONG PUT Vs COVERED PUT - Risk & Reward

	LONG PUT	COVERED PUT
Maximum Profit Scenario	Profit = Strike Price of Long Put - Premium Paid	The profit happens when the price of the underlying moves above strike price of Short Put.
Maximum Loss Scenario	Max Loss = Premium Paid + Commissions Paid	Price of Underlying - Sale Price of Underlying - Premium Received
Risk	Limited	Unlimited
Reward	Unlimited	Limited

LONG PUT Vs COVERED PUT - Strategy Pros & Cons

	LONG PUT	COVERED PUT
Similar Strategies	Protective Call, Short Put	Bear Put Spread, Bear Call Spread
Disadvantage	• 100% loss if strike price, expiration dates or underlying stocks are badly chosen. • Time decay.	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.
Advantages	• Limited risk to the premium paid. • Less capital investment and more profit. • Unlimited profit potential with limited risk.	• 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.