PUT BACKSPREAD	COVERED COMBINATION
About Strategy	Put Backspread Option Strategy If the trader is bearish on market and bullish in volatility, he will implement this strategy. However the trader can be neutral in nature i.e. indifferent if the market moves in either of the direction, this strategy will make profits, but uptrend will give a capped income than downtrend which will give unlimited returns. Read more..	Covered Combination Option Strategy This strategy involves selling OTM Call & Put Options and buying the underlying asset in either cash or futures market. It is also known as Covered Strangle as the profits are capped and risk is potentially unlimited. Risk: Un .. Read more..

PUT BACKSPREAD Vs COVERED COMBINATION - Details

	PUT BACKSPREAD	COVERED COMBINATION
Market View	Bearish	Bullish
Type (CE/PE)	PE (Put Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	2	2
Strategy Level	Advance	Advance
Reward Profile		Limited
Risk Profile		Unlimited
Breakeven Point		(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

PUT BACKSPREAD Vs COVERED COMBINATION - When & How to use ?

	PUT BACKSPREAD	COVERED COMBINATION
Market View	Bearish	Bullish
When to use?		This strategy is mainly suited for investors who are moderately bullish on a stock and are comfortable with increasing their position in the event of a price decline.
Action		Sell 1 OTM Call, Sell 1 OTM Put
Breakeven Point		(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

PUT BACKSPREAD Vs COVERED COMBINATION - Risk & Reward

	PUT BACKSPREAD	COVERED COMBINATION
Maximum Profit Scenario		Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received - Commissions Paid
Maximum Loss Scenario		Purchase Price of Underlying + Strike Price of Short Put - (2 x Price of Underlying) - Max Profit + Commissions Paid
Risk	Limited	Unlimited
Reward	Unlimited	Limited

PUT BACKSPREAD Vs COVERED COMBINATION - Strategy Pros & Cons

	PUT BACKSPREAD	COVERED COMBINATION
Similar Strategies		Stock Repair Strategy
Disadvantage		Combinations can be profitable in sideways or rising markets. Greater combined net credit increases downside protection and potential return.
Advantages		Limited Maximum Profit on the upside. Covered Combinations should only be traded on stocks that are bullish.