CHRISTMAS TREE SPREAD WITH PUT OPTION	PROTECTIVE PUT
About Strategy	Christmas Tree Spread with Puts Option Strategy This Strategy is an advance option strategy that consists of three legs and six total options. In this strategy buying one put at strike price D, skipping strike price C, writes three calls at strike price B, and buying two calls at strike price A for same expiration dates for neutral to bearish forecast. An investor used this strategy to potential returns 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..

CHRISTMAS TREE SPREAD WITH PUT OPTION Vs PROTECTIVE PUT - Details

	CHRISTMAS TREE SPREAD WITH PUT OPTION	PROTECTIVE PUT
Market View	Bearish	Bullish
Type (CE/PE)	CE (Call Option)	PE (Put Option)
Number Of Positions	6	1
Strategy Level	Advance	Beginners
Reward Profile	Limited	Unlimited
Risk Profile	Limited	Limited
Breakeven Point	Lowest strike prices + the half premium – premium paid	Purchase Price of Underlying + Premium Paid

CHRISTMAS TREE SPREAD WITH PUT OPTION Vs PROTECTIVE PUT - When & How to use ?

	CHRISTMAS TREE SPREAD WITH PUT OPTION	PROTECTIVE PUT
Market View	Bearish	Bullish
When to use?	This Strategy is used when an investor wants potential returns.	This strategy is adopted when a trader is long on the underlying asset but skeptical of the downside.
Action	Buying one ATM, Selling 3 Puts, Buying one more OTM Put	Buy 1 ATM Put
Breakeven Point	Lowest strike prices + the half premium – premium paid	Purchase Price of Underlying + Premium Paid

CHRISTMAS TREE SPREAD WITH PUT OPTION Vs PROTECTIVE PUT - Risk & Reward

	CHRISTMAS TREE SPREAD WITH PUT OPTION	PROTECTIVE PUT
Maximum Profit Scenario	Equal middle strike price – higher strike price – the premium	Price of Underlying - Purchase Price of Underlying - Premium Paid
Maximum Loss Scenario	Net Debit paid for the strategy.	Premium Paid + Purchase Price of Underlying - Put Strike + Commissions Paid
Risk	Limited	Limited
Reward	Limited	Unlimited

CHRISTMAS TREE SPREAD WITH PUT OPTION Vs PROTECTIVE PUT - Strategy Pros & Cons

	CHRISTMAS TREE SPREAD WITH PUT OPTION	PROTECTIVE PUT
Similar Strategies	Butterfly spreads	Long Call, Call Backspread
Disadvantage	• Potential profit is lower or limited.	• 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	• The potential of loss is limited.	• 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.