COVERED CALL	LONG 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..	Long Put Option Strategy This strategy is implemented by buying 1 Put Option i.e. a single position, when the person is bearish on the market and expects the market to move downwards in the near future. Risk: The maximum loss will be the premium amount paid.< .. Read more..

COVERED CALL Vs LONG PUT - Details

	COVERED CALL	LONG PUT
Market View	Bullish	Bearish
Type (CE/PE)	CE (Call Option)	PE (Put 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	Strike Price of Long Put - Premium Paid

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

	COVERED CALL	LONG 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.	A long put option strategy works well when you're expecting the underlying asset to sharply decline or be volatile in near future.
Action	(Buy Underlying) (Sell OTM Call Option)	Buy Put Option
Breakeven Point	Purchase Price of Underlying- Premium Received	Strike Price of Long Put - Premium Paid

COVERED CALL Vs LONG PUT - Risk & Reward

	COVERED CALL	LONG PUT
Maximum Profit Scenario	[Call Strike Price - Stock Price Paid] + Premium Received	Profit = Strike Price of Long Put - Premium Paid
Maximum Loss Scenario	Purchase Price of Underlying - Price of Underlying) + Premium Received	Max Loss = Premium Paid + Commissions Paid
Risk	Unlimited	Limited
Reward	Limited	Unlimited

COVERED CALL Vs LONG PUT - Strategy Pros & Cons

	COVERED CALL	LONG PUT
Similar Strategies	Bull Call Spread	Protective Call, Short Put
Disadvantage	• Unlimited risk, limited reward. • Inability to earn interest on the proceed used to buy the underlying stock.	• 100% loss if strike price, expiration dates or underlying stocks are badly chosen. • Time decay.
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 to the premium paid. • Less capital investment and more profit. • Unlimited profit potential with limited risk.