COVERED CALL	PROTECTIVE CALL
About Strategy	Covered Call Option Strategy Mr. X owns Reliance Shares and expects the price to rise in the near future. Mr. X is entitled to receive dividends for the shares he hold in cash market. Covered Call Strategy involves selling of OTM Call Option of the same underlying asset. The OTM Call Option Strike Price will generally be the price, where Mr. X will look to get out o Read more..	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..

COVERED CALL Vs PROTECTIVE CALL - Details

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

COVERED CALL Vs PROTECTIVE CALL - When & How to use ?

	COVERED CALL	PROTECTIVE CALL
Market View	Bullish	Bearish
When to use?	An investor has a short term neutral view on the asset and for this reason holds the asset long and has a short position to generate income.	This strategy is implemented when a trader is bearish on the market and expects to go down.
Action	(Buy Underlying) (Sell OTM Call Option)	Buy 1 ATM Call
Breakeven Point	Purchase Price of Underlying- Premium Received	Sale Price of Underlying + Premium Paid

COVERED CALL Vs PROTECTIVE CALL - Risk & Reward

	COVERED CALL	PROTECTIVE CALL
Maximum Profit Scenario	[Call Strike Price - Stock Price Paid] + Premium Received	Sale Price of Underlying - Price of Underlying - Premium Paid
Maximum Loss Scenario	Purchase Price of Underlying - Price of Underlying) + Premium Received	Premium Paid + Call Strike Price - Sale Price of Underlying + Commissions Paid
Risk	Unlimited	Limited
Reward	Limited	Unlimited

COVERED CALL Vs PROTECTIVE CALL - Strategy Pros & Cons

	COVERED CALL	PROTECTIVE CALL
Similar Strategies	Bull Call Spread	Put Backspread, Long Put
Disadvantage	• Unlimited risk, limited reward. • Inability to earn interest on the proceed used to buy the underlying stock.	• Profitable when market moves as expected. • Not good for beginners.
Advantages	• Profit from option premium, rise in the underlying stock and dividends on the stock. • Allows you to generate income from your holding. • Profit when underlying stock price rise, move sideways or marginal fall.	• 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.