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Bull Put Spread Strategy with Example

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Bull Put Spread Strategy with Nifty Example The Bull Put Spread is a popular bullish options strategy used when you expect the market to stay above a certain level or move slightly upward. It is a limited profit, limited loss strategy and works best in a range-bound to mildly bullish market . It is also called a Credit Put Spread because you receive premium upfront. What is a Bull Put Spread? A Bull Put Spread involves: 🔹 Selling a higher strike Put Option 🔹 Buying a lower strike Put Option 🔹 Same expiry date This strategy benefits from: ✔ Time decay (Theta) ✔ Stable or rising markets ✔ Defined risk Example: Nifty February Expiry Using the same strike structure concept (200-point difference) as your previous example: Sell Nifty Feb 25500 PE @ ₹222 Buy Nifty Feb 25300 PE @ ₹50 Assume Nifty is trading near 25500 . Step 1: Net Premium Received (Credit) Net Credit = 222 – 50 Net Credit = ₹172 This ₹172 is your maximum possible profit . Maximum Profit Maximum Profit = Net Premium Re...
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Bear Call Spread Strategy with Example

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  Bear Call Spread Strategy  with Nifty Example The Bear Call Spread is a popular bearish options strategy used when you expect the market to stay below a certain level or move slightly downward. It is a limited profit, limited loss strategy and works best in a range-bound to mildly bearish market . What is a Bear Call Spread? A Bear Call Spread involves: 🔹 Selling a lower strike Call Option 🔹 Buying a higher strike Call Option 🔹 Same expiry date It is also called a Credit Spread because you receive premium upfront. Example: Nifty February Expiry Let’s understand with your given strikes: Sell Nifty Feb 25500 CE @ ₹222 Buy Nifty Feb 25700 CE @ ₹50 Assume Nifty is trading near 25500 . Step 1: Net Premium Received (Credit) Net Credit = 222 – 50 Net Credit = ₹172 This ₹172 is your maximum possible profit . Maximum Profit Maximum Profit = Net Premium Received = ₹172 per lot 👉 This happens if Nifty expires at or below 25500 . Both options expire worthless, and you keep the f...
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Bear Put Spread Strategy with example

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  Bear Put Spread Strategy with Example (Moderate Bearish Strategy) The Bear Put Spread is a popular moderately bearish options strategy used when you expect the market to fall gradually, but not sharply. It is a limited risk, limited reward strategy, making it ideal for traders who want controlled downside exposure with lower cost than buying a single put option. What Is a Bear Put Spread? A Bear Put Spread involves: ✅ Buying one Put Option (higher strike price) ✅ Selling one Put Option (lower strike price) ✅ Same expiry date ✅ Same underlying (e.g., Nifty) ⚠ Important: Both options must have different strike prices . If you use the same strike price , it is not a spread — it becomes a neutral or closed position. When to Use Bear Put Spread? You should use this strategy when: 📉 You expect the market to fall moderately 📊 Market is weak but not crashing 💰 You want limited risk 💵 You are comfortable with capped profit This strategy works...
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Bull Call Spread Strategy with Example

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  Bull Call Spread Strategy with Nifty Example The Bull Call Spread is a popular moderately bullish options strategy used when you expect the market to rise gradually, but not aggressively. It is a limited risk, limited reward strategy, making it suitable for traders who want controlled exposure with reduced cost compared to a simple long call. What Is a Bull Call Spread? A Bull Call Spread involves: ✅ Buying one Call Option (lower strike price) ✅ Selling another Call Option (higher strike price) ✅ Same expiry date This strategy reduces the cost of buying a call option because the premium received from selling the higher strike call offsets part of the purchase cost. When to Use a Bull Call Spread? You should use this strategy when: 📈 You expect the market to move moderately upward 📊 Market is in a range-bound to slow bullish trend 💰 You want limited risk 💵 You are comfortable with capped profit It is ideal for traders who believe the marke...
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Protective Put Strategy – (Stock + Put Option Hedge)

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  Protective Put Strategy – (Stock + Put Option Hedge) Options trading offers multiple strategies to manage risk and enhance returns. One of the most effective risk-management strategies for bullish investors is the Protective Put Strategy . This strategy allows investors to participate in upside gains while limiting downside risk , making it a popular choice among professional traders, portfolio managers, and investors holding leveraged positions. What is a Protective Put Strategy? A Protective Put is created when an investor: Buys the underlying stock (bullish view) Buys a put option on the same stock (for downside protection) It is also known as the “Married Put” strategy. In simple terms, the put option acts like insurance for your stock position. If the stock price falls sharply, the put option increases in value and offsets the loss in the stock. How Does a Protective Put Work? Let’s understand with a practical example. Assumptions: Stock Price = ₹1,000 You buy...
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Covered Call Strategy with Example

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 Options trading offers multiple strategies to generate income and manage risk. One of the most popular conservative strategies for range-bound markets is the Covered Call Strategy . This strategy is ideal for investors who already hold shares and expect the stock to trade sideways or rise moderately. What Is a Covered Call Strategy? A Covered Call strategy involves: Buying or holding shares in the cash market Selling a Call option on the same stock Maintaining the same quantity in both positions The strategy generates income through option premium while offering limited downside protection. However, the upside profit is capped. When Should You Use a Covered Call? A covered call works best when: The market is range-bound You are mildly bullish You do not expect a strong breakout Implied volatility is relatively high (better premium) It is not suitable when you expect a sharp upward rally. Example: Covered Call on Reliance Industries 4 Let us understand this strategy using Reliance ...
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Long Put Strategy in Options Trading with example

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  Long Put Strategy in Options Trading –  with Example Options trading offers powerful strategies for different market views. If you expect the market to fall sharply, one of the most effective bearish strategies is the Long Put Strategy . Just like a long call benefits from an upward move, a long put benefits from a strong downward move — with limited risk and high reward potential. What is a Long Put Strategy? A Long Put strategy involves buying a put option when you expect the underlying asset (such as Nifty) to decline in price. When you buy a put option: You get the right (not obligation) to sell the asset at a fixed price (strike price). You pay a premium for this right. Your loss is limited to the premium paid. Your profit potential increases significantly if the market falls sharply. Market Condition Required You should use a Long Put when: The market is in a bearish trend Momentum indicators show weakness A breakdown below support is confirmed Volatility is expec...
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