PROTECTIVE CALL	RISK REVERSAL
About Strategy	Protective Call Option Strategy This strategy is simply the reversal of the Synthetic Call Strategy. This strategy is implemented when a trader is bearish on the market and expects to go down. Trader will short underlying stock in the cash market and buy either an ATM Call Option or OTM Call Option. The Call Option is bought to protect / hedge the upside risk on the short position. The 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..

PROTECTIVE CALL Vs RISK REVERSAL - Details

	PROTECTIVE CALL	RISK REVERSAL
Market View	Bearish	Bullish
Type (CE/PE)	CE (Call Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	1	2
Strategy Level	Beginners	Advance
Reward Profile	Unlimited	Unlimited
Risk Profile	Limited	Unlimited
Breakeven Point	Sale Price of Underlying + Premium Paid	Premium received - Put Strike Price

PROTECTIVE CALL Vs RISK REVERSAL - When & How to use ?

	PROTECTIVE CALL	RISK REVERSAL
Market View	Bearish	Bullish
When to use?	This strategy is implemented when a trader is bearish on the market and expects to go down.	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	Buy 1 ATM Call	This strategy work when an investor want to hedge their position by buying a put option and selling a call option.
Breakeven Point	Sale Price of Underlying + Premium Paid	Premium received - Put Strike Price

PROTECTIVE CALL Vs RISK REVERSAL - Risk & Reward

	PROTECTIVE CALL	RISK REVERSAL
Maximum Profit Scenario	Sale Price of Underlying - Price of Underlying - Premium Paid	You have unlimited profit potential to the upside.
Maximum Loss Scenario	Premium Paid + Call Strike Price - Sale Price of Underlying + Commissions Paid	You have nearly unlimited downside risk as well because you are short the put
Risk	Limited	Unlimited
Reward	Unlimited	Unlimited

PROTECTIVE CALL Vs RISK REVERSAL - Strategy Pros & Cons

	PROTECTIVE CALL	RISK REVERSAL
Similar Strategies	Put Backspread, Long Put	-
Disadvantage	• Profitable when market moves as expected. • Not good for beginners.	Unlimited Risk.
Advantages	• Limited risk if the market moves in opposite direction as expected. • Allows you to keep open a profitable position to make further profits. • Unlimited profit potential.	Unlimited profit.