CHRISTMAS TREE SPREAD WITH PUT OPTION	SHORT STRANGLE
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..	Short Strangle Option Strategy  This strategy is similar to Short Straddle; the only difference is of the strike prices at which the positions are built. Short Strangle involves selling of one OTM Call Option and selling of one OTM Put Option, of the same expiry date and same underlying asset. Here the probability of making profits is more as there is a spread between the two strike prices, and if .. Read more..

CHRISTMAS TREE SPREAD WITH PUT OPTION Vs SHORT STRANGLE - Details

	CHRISTMAS TREE SPREAD WITH PUT OPTION	SHORT STRANGLE
Market View	Bearish	Neutral
Type (CE/PE)	CE (Call Option)	CE (Call Option) + PE (Put 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	Lower Break-even = Strike Price of Put - Net Premium, Upper Break-even = Strike Price of Call+ Net Premium

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

	CHRISTMAS TREE SPREAD WITH PUT OPTION	SHORT STRANGLE
Market View	Bearish	Neutral
When to use?	This Strategy is used when an investor wants potential returns.	This strategy is perfect in a neutral market scenario when the underlying is expected to be less volatile.
Action	Buying one ATM, Selling 3 Puts, Buying one more OTM Put	Sell OTM Call, Sell OTM Put
Breakeven Point	Lowest strike prices + the half premium – premium paid	Lower Break-even = Strike Price of Put - Net Premium, Upper Break-even = Strike Price of Call+ Net Premium

CHRISTMAS TREE SPREAD WITH PUT OPTION Vs SHORT STRANGLE - Risk & Reward

	CHRISTMAS TREE SPREAD WITH PUT OPTION	SHORT STRANGLE
Maximum Profit Scenario	Equal middle strike price – higher strike price – the premium	Maximum Profit = Net Premium Received
Maximum Loss Scenario	Net Debit paid for the strategy.	Loss = Price of Underlying - Strike Price of Short Call - Net Premium Received
Risk	Limited	Unlimited
Reward	Limited	Limited

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

	CHRISTMAS TREE SPREAD WITH PUT OPTION	SHORT STRANGLE
Similar Strategies	Butterfly spreads	Short Straddle, Long Strangle
Disadvantage	• Potential profit is lower or limited.	• Unlimited loss is associated with this strategy, not recommended for beginners. • Limited reward amount.
Advantages	• The potential of loss is limited.	• Higher chance of profitability due to selling of OTM options. • Advantage from double time decay and a contraction in volatility. • Traders can book profit when underlying asset stays within a tight trading range.