CHRISTMAS TREE SPREAD WITH PUT OPTION	RISK REVERSAL
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..	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..

CHRISTMAS TREE SPREAD WITH PUT OPTION Vs RISK REVERSAL - Details

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

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

	CHRISTMAS TREE SPREAD WITH PUT OPTION	RISK REVERSAL
Market View	Bearish	Bullish
When to use?	This Strategy is used when an investor wants potential returns.	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	Buying one ATM, Selling 3 Puts, Buying one more OTM Put	This strategy work when an investor want to hedge their position by buying a put option and selling a call option.
Breakeven Point	Lowest strike prices + the half premium – premium paid	Premium received - Put Strike Price

CHRISTMAS TREE SPREAD WITH PUT OPTION Vs RISK REVERSAL - Risk & Reward

	CHRISTMAS TREE SPREAD WITH PUT OPTION	RISK REVERSAL
Maximum Profit Scenario	Equal middle strike price – higher strike price – the premium	You have unlimited profit potential to the upside.
Maximum Loss Scenario	Net Debit paid for the strategy.	You have nearly unlimited downside risk as well because you are short the put
Risk	Limited	Unlimited
Reward	Limited	Unlimited

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

	CHRISTMAS TREE SPREAD WITH PUT OPTION	RISK REVERSAL
Similar Strategies	Butterfly spreads	-
Disadvantage	• Potential profit is lower or limited.	Unlimited Risk.
Advantages	• The potential of loss is limited.	Unlimited profit.