COVERED CALL	LONG STRADDLE
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 Straddle Option Strategy  Straddle is neither bullish nor bearish strategy; it is a market neutral strategy. Here a trader wishes to take advantage of the volatility in the market. This strategy involves buying of one Call option and one Put option of the same strike price, same expiry date and of the same underlying asset. Now a trader is bound to make profits once stock moves in either direc .. Read more..

COVERED CALL Vs LONG STRADDLE - Details

	COVERED CALL	LONG STRADDLE
Market View	Bullish	Neutral
Type (CE/PE)	CE (Call Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	2	2
Strategy Level	Advance	Beginners
Reward Profile	Limited	Unlimited
Risk Profile	Unlimited	Limited
Breakeven Point	Purchase Price of Underlying- Premium Received	Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call + Net Premium

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

	COVERED CALL	LONG STRADDLE
Market View	Bullish	Neutral
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 options strategy is work well when and investor market view is bearish. The strategy minimizes your risk in the event of prime movements going against your expectations.
Action	(Buy Underlying) (Sell OTM Call Option)	Buy Call Option, Buy Put Option
Breakeven Point	Purchase Price of Underlying- Premium Received	Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call + Net Premium

COVERED CALL Vs LONG STRADDLE - Risk & Reward

	COVERED CALL	LONG STRADDLE
Maximum Profit Scenario	[Call Strike Price - Stock Price Paid] + Premium Received	Max profit is achieved when at one option is exercised.
Maximum Loss Scenario	Purchase Price of Underlying - Price of Underlying) + Premium Received	Maximum Loss = Net Premium Paid
Risk	Unlimited	Limited
Reward	Limited	Unlimited

COVERED CALL Vs LONG STRADDLE - Strategy Pros & Cons

	COVERED CALL	LONG STRADDLE
Similar Strategies	Bull Call Spread	Bear Put Spread
Disadvantage	• Unlimited risk, limited reward. • Inability to earn interest on the proceed used to buy the underlying stock.	• There should be continuous movement of the stock and options price for this strategy to be profitable. • Time decay hurts long option if the strike price, expiration date or underlying stock are badly chosen.
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.	• Unlimited potential beyond the breakeven point in either direction . • Book your profit from highly volatile stocks without determining the direction. • Limited risk, more profit.