COVERED CALL	SHORT 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..	Short Straddle Option strategy This strategy is just the opposite of Long Straddle. A trader should adopt this strategy when he expects less volatility in the near future. Here, a trader will sell one Call Option & one Put Option of the same strike price, same expiry date and of the same underlying asset. If the stock/index hovers around the same levels then both the options will expire worthless an .. Read more..

COVERED CALL Vs SHORT STRADDLE - Details

	COVERED CALL	SHORT 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	Advance
Reward Profile	Limited	Limited
Risk Profile	Unlimited	Unlimited
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 SHORT STRADDLE - When & How to use ?

	COVERED CALL	SHORT 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 strategy is work well when an investor expect a flat market in the coming days with very less movement in the prices of underlying asset.
Action	(Buy Underlying) (Sell OTM Call Option)	Sell Call Option, Sell 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 SHORT STRADDLE - Risk & Reward

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

COVERED CALL Vs SHORT STRADDLE - Strategy Pros & Cons

	COVERED CALL	SHORT STRADDLE
Similar Strategies	Bull Call Spread	Short Strangle
Disadvantage	• Unlimited risk, limited reward. • Inability to earn interest on the proceed used to buy the underlying stock.	• Unlimited risk. • If the price of the underlying asset moves in either direction then huge losses can occur.
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.	• A trader can earn profit even when there is no volatility in the market . • Allows you to benefit from double time decay. • Trader can collect premium from puts and calls option .