COVERED CALL	COVERED COMBINATION
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..	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..

COVERED CALL Vs COVERED COMBINATION - Details

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

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

	COVERED CALL	COVERED COMBINATION
Market View	Bullish	Bullish
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 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	(Buy Underlying) (Sell OTM Call Option)	Sell 1 OTM Call, Sell 1 OTM Put
Breakeven Point	Purchase Price of Underlying- Premium Received	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

COVERED CALL Vs COVERED COMBINATION - Risk & Reward

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

COVERED CALL Vs COVERED COMBINATION - Strategy Pros & Cons

	COVERED CALL	COVERED COMBINATION
Similar Strategies	Bull Call Spread	Stock Repair Strategy
Disadvantage	• Unlimited risk, limited reward. • Inability to earn interest on the proceed used to buy the underlying stock.	Combinations can be profitable in sideways or rising markets. Greater combined net credit increases downside protection and potential return.
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 Maximum Profit on the upside. Covered Combinations should only be traded on stocks that are bullish.