CHRISTMAS TREE SPREAD WITH PUT OPTION	COVERED COMBINATION
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 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..

CHRISTMAS TREE SPREAD WITH PUT OPTION Vs COVERED COMBINATION - Details

	CHRISTMAS TREE SPREAD WITH PUT OPTION	COVERED COMBINATION
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	Limited
Risk Profile	Limited	Unlimited
Breakeven Point	Lowest strike prices + the half premium – premium paid	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

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

	CHRISTMAS TREE SPREAD WITH PUT OPTION	COVERED COMBINATION
Market View	Bearish	Bullish
When to use?	This Strategy is used when an investor wants potential returns.	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	Buying one ATM, Selling 3 Puts, Buying one more OTM Put	Sell 1 OTM Call, Sell 1 OTM Put
Breakeven Point	Lowest strike prices + the half premium – premium paid	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

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

	CHRISTMAS TREE SPREAD WITH PUT OPTION	COVERED COMBINATION
Maximum Profit Scenario	Equal middle strike price – higher strike price – the premium	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received - Commissions Paid
Maximum Loss Scenario	Net Debit paid for the strategy.	Purchase Price of Underlying + Strike Price of Short Put - (2 x Price of Underlying) - Max Profit + Commissions Paid
Risk	Limited	Unlimited
Reward	Limited	Limited

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

	CHRISTMAS TREE SPREAD WITH PUT OPTION	COVERED COMBINATION
Similar Strategies	Butterfly spreads	Stock Repair Strategy
Disadvantage	• Potential profit is lower or limited.	Combinations can be profitable in sideways or rising markets. Greater combined net credit increases downside protection and potential return.
Advantages	• The potential of loss is limited.	Limited Maximum Profit on the upside. Covered Combinations should only be traded on stocks that are bullish.