CHRISTMAS TREE SPREAD WITH PUT OPTION	COVERED 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..	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..

CHRISTMAS TREE SPREAD WITH PUT OPTION Vs COVERED PUT - Details

	CHRISTMAS TREE SPREAD WITH PUT OPTION	COVERED PUT
Market View	Bearish	Bearish
Type (CE/PE)	CE (Call Option)	PE (Put Option) + Underlying
Number Of Positions	6	2
Strategy Level	Advance	Advance
Reward Profile	Limited	Limited
Risk Profile	Limited	Unlimited
Breakeven Point	Lowest strike prices + the half premium – premium paid	Futures Price + Premium Received

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

	CHRISTMAS TREE SPREAD WITH PUT OPTION	COVERED PUT
Market View	Bearish	Bearish
When to use?	This Strategy is used when an investor wants potential returns.	The Covered Put works well when the market is moderately Bearish.
Action	Buying one ATM, Selling 3 Puts, Buying one more OTM Put	Sell Underlying Sell OTM Put Option
Breakeven Point	Lowest strike prices + the half premium – premium paid	Futures Price + Premium Received

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

	CHRISTMAS TREE SPREAD WITH PUT OPTION	COVERED PUT
Maximum Profit Scenario	Equal middle strike price – higher strike price – the premium	The profit happens when the price of the underlying moves above strike price of Short Put.
Maximum Loss Scenario	Net Debit paid for the strategy.	Price of Underlying - Sale Price of Underlying - Premium Received
Risk	Limited	Unlimited
Reward	Limited	Limited

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

	CHRISTMAS TREE SPREAD WITH PUT OPTION	COVERED PUT
Similar Strategies	Butterfly spreads	Bear Put Spread, Bear Call Spread
Disadvantage	• Potential profit is lower or limited.	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.
Advantages	• The potential of loss is limited.	• 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.