COVERED CALL	SHORT 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..	Short Call Option Strategy A trader shorts or writes a Call Option when he feels that underlying stock price is likely to go down. Selling Call Option is a strategy preferred for experienced traders. However this strategy is very risky in nature. If the stock rallies on the upside, your risk becomes potentially unquantifiable and unlimited. If the strategy .. Read more..

COVERED CALL Vs SHORT CALL - Details

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

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

	COVERED CALL	SHORT 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.	It is an aggressive strategy and involves huge risks. It should be used only in case where trader is certain about the bearish market view on the underlying.
Action	(Buy Underlying) (Sell OTM Call Option)	Sell or Write Call Option
Breakeven Point	Purchase Price of Underlying- Premium Received	Strike Price of Short Call + Premium Received

COVERED CALL Vs SHORT CALL - Risk & Reward

	COVERED CALL	SHORT CALL
Maximum Profit Scenario	[Call Strike Price - Stock Price Paid] + Premium Received	Max Profit = Premium Received
Maximum Loss Scenario	Purchase Price of Underlying - Price of Underlying) + Premium Received	Loss Occurs When Price of Underlying > Strike Price of Short Call + Premium Received
Risk	Unlimited	Unlimited
Reward	Limited	Limited

COVERED CALL Vs SHORT CALL - Strategy Pros & Cons

	COVERED CALL	SHORT CALL
Similar Strategies	Bull Call Spread	Covered Put, Covered Calls
Disadvantage	• Unlimited risk, limited reward. • Inability to earn interest on the proceed used to buy the underlying stock.	• Unlimited risk to the upside underlying stocks. • Potential loss more than the premium collected.
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.	• With the help of this strategy, traders can book profit from falling prices in the underlying asset. • Less investment, more profit. • Traders can book profit when underlying stock price fall, move sideways or rise by a small amount.