LONG PUT	RISK REVERSAL
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..	Risk Reversal Option Strategy This strategy protects an investor from unfavourable price movements in the position but limits the profits can be made on that position. A risk reversal is a hedging strategy that protects a long or short position by using put and call options. In this one option is buying and other is written. In this strategy the trader has to pay a premium, while the written option prod .. Read more..

LONG PUT Vs RISK REVERSAL - Details

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

LONG PUT Vs RISK REVERSAL - When & How to use ?

	LONG PUT	RISK REVERSAL
Market View	Bearish	Bullish
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.	This strategy can be used for hedging. When an investor want to protect long or short position by using a call and put option.
Action	Buy Put Option	This strategy work when an investor want to hedge their position by buying a put option and selling a call option.
Breakeven Point	Strike Price of Long Put - Premium Paid	Premium received - Put Strike Price

LONG PUT Vs RISK REVERSAL - Risk & Reward

	LONG PUT	RISK REVERSAL
Maximum Profit Scenario	Profit = Strike Price of Long Put - Premium Paid	You have unlimited profit potential to the upside.
Maximum Loss Scenario	Max Loss = Premium Paid + Commissions Paid	You have nearly unlimited downside risk as well because you are short the put
Risk	Limited	Unlimited
Reward	Unlimited	Unlimited

LONG PUT Vs RISK REVERSAL - Strategy Pros & Cons

	LONG PUT	RISK REVERSAL
Similar Strategies	Protective Call, Short Put	-
Disadvantage	• 100% loss if strike price, expiration dates or underlying stocks are badly chosen. • Time decay.	Unlimited Risk.
Advantages	• Limited risk to the premium paid. • Less capital investment and more profit. • Unlimited profit potential with limited risk.	Unlimited profit.