CHRISTMAS TREE SPREAD WITH PUT OPTION	COVERED CALL
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 Call Option Strategy Mr. X owns Reliance Shares and expects the price to rise in the near future. Mr. X is entitled to receive dividends for the shares he hold in cash market. Covered Call Strategy involves selling of OTM Call Option of the same underlying asset. The OTM Call Option Strike Price will generally be the price, where Mr. X will look to get out o .. Read more..

CHRISTMAS TREE SPREAD WITH PUT OPTION Vs COVERED CALL - Details

	CHRISTMAS TREE SPREAD WITH PUT OPTION	COVERED CALL
Market View	Bearish	Bullish
Type (CE/PE)	CE (Call Option)	CE (Call Option)
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	Purchase Price of Underlying- Premium Received

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

	CHRISTMAS TREE SPREAD WITH PUT OPTION	COVERED CALL
Market View	Bearish	Bullish
When to use?	This Strategy is used when an investor wants potential returns.	An investor has a short term neutral view on the asset and for this reason holds the asset long and has a short position to generate income.
Action	Buying one ATM, Selling 3 Puts, Buying one more OTM Put	(Buy Underlying) (Sell OTM Call Option)
Breakeven Point	Lowest strike prices + the half premium – premium paid	Purchase Price of Underlying- Premium Received

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

	CHRISTMAS TREE SPREAD WITH PUT OPTION	COVERED CALL
Maximum Profit Scenario	Equal middle strike price – higher strike price – the premium	[Call Strike Price - Stock Price Paid] + Premium Received
Maximum Loss Scenario	Net Debit paid for the strategy.	Purchase Price of Underlying - Price of Underlying) + Premium Received
Risk	Limited	Unlimited
Reward	Limited	Limited

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

	CHRISTMAS TREE SPREAD WITH PUT OPTION	COVERED CALL
Similar Strategies	Butterfly spreads	Bull Call Spread
Disadvantage	• Potential profit is lower or limited.	• Unlimited risk, limited reward. • Inability to earn interest on the proceed used to buy the underlying stock.
Advantages	• The potential of loss is limited.	• Profit from option premium, rise in the underlying stock and dividends on the stock. • Allows you to generate income from your holding. • Profit when underlying stock price rise, move sideways or marginal fall.