COVERED CALL	COVERED PUT
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 Put Option Strategy  This strategy is exactly opposite to Covered Call Strategy. Here the investor is neutral or moderately bearish in nature and wants to take advantage of the price fall in the near future. The trader will short one lot of stock future. Now the trader will short ATM Put Option, the option strike price will be his exit price. If the prices rally above the strike price, the .. Read more..

COVERED CALL Vs COVERED PUT - Details

	COVERED CALL	COVERED PUT
Market View	Bullish	Bearish
Type (CE/PE)	CE (Call Option)	PE (Put Option) + Underlying
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	Futures Price + Premium Received

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

	COVERED CALL	COVERED PUT
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.	The Covered Put works well when the market is moderately Bearish.
Action	(Buy Underlying) (Sell OTM Call Option)	Sell Underlying Sell OTM Put Option
Breakeven Point	Purchase Price of Underlying- Premium Received	Futures Price + Premium Received

COVERED CALL Vs COVERED PUT - Risk & Reward

	COVERED CALL	COVERED PUT
Maximum Profit Scenario	[Call Strike Price - Stock Price Paid] + Premium Received	The profit happens when the price of the underlying moves above strike price of Short Put.
Maximum Loss Scenario	Purchase Price of Underlying - Price of Underlying) + Premium Received	Price of Underlying - Sale Price of Underlying - Premium Received
Risk	Unlimited	Unlimited
Reward	Limited	Limited

COVERED CALL Vs COVERED PUT - Strategy Pros & Cons

	COVERED CALL	COVERED PUT
Similar Strategies	Bull Call Spread	Bear Put Spread, Bear Call Spread
Disadvantage	• Unlimited risk, limited reward. • Inability to earn interest on the proceed used to buy the underlying stock.	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.
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.	• Investors can book profit when underlying stock price drop, move sideways or rises by a small amount. • Able to generate monthly income. • Able to generate profit from fall in prices or mild increase in the prices.