BULL CALL SPREAD	COVERED COMBINATION
About Strategy	Bull Call Spread Option Strategy Bull Call Spread option trading strategy is used by a trader who is bullish in nature and expects the underlying asset to give decent returns in the near future. This strategy includes buying of an ‘In The Money’ Call Option and selling of ‘Deep Out Of the Money’ Call Option of the same underlying asset and the same expiration date. Read more..	Covered Combination Option Strategy This strategy involves selling OTM Call & Put Options and buying the underlying asset in either cash or futures market. It is also known as Covered Strangle as the profits are capped and risk is potentially unlimited. Risk: Un .. Read more..

BULL CALL SPREAD Vs COVERED COMBINATION - Details

	BULL CALL SPREAD	COVERED COMBINATION
Market View	Bullish	Bullish
Type (CE/PE)	CE (Call Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	2	2
Strategy Level	Beginners	Advance
Reward Profile	Limited	Limited
Risk Profile	Limited	Unlimited
Breakeven Point	Strike price of purchased call + net premium paid	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

BULL CALL SPREAD Vs COVERED COMBINATION - When & How to use ?

	BULL CALL SPREAD	COVERED COMBINATION
Market View	Bullish	Bullish
When to use?	This strategy is used when an investor is Bullish in the market but expect the underlying to gain mildly in near future.	This strategy is mainly suited for investors who are moderately bullish on a stock and are comfortable with increasing their position in the event of a price decline.
Action	Buy ITM Call Option, Sell OTM Call Option	Sell 1 OTM Call, Sell 1 OTM Put
Breakeven Point	Strike price of purchased call + net premium paid	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

BULL CALL SPREAD Vs COVERED COMBINATION - Risk & Reward

	BULL CALL SPREAD	COVERED COMBINATION
Maximum Profit Scenario	(Strike Price of Call 1 - Strike Price of Call 2) - Net Premium Paid	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received - Commissions Paid
Maximum Loss Scenario	Net Premium Paid	Purchase Price of Underlying + Strike Price of Short Put - (2 x Price of Underlying) - Max Profit + Commissions Paid
Risk	Limited	Unlimited
Reward	Limited	Limited

BULL CALL SPREAD Vs COVERED COMBINATION - Strategy Pros & Cons

	BULL CALL SPREAD	COVERED COMBINATION
Similar Strategies	Collar	Stock Repair Strategy
Disadvantage	• Limited profit potential to the higher strike call sold if the underlying stock price rises. • Maximum profit only if stock rises to the higher of 2 strike prices selected.	Combinations can be profitable in sideways or rising markets. Greater combined net credit increases downside protection and potential return.
Advantages	• Allows you to reduce risk and cost of your investment. • When placing the spread, exit strategy is pre-determined in advance. • Risk is limited to the net premium paid.	Limited Maximum Profit on the upside. Covered Combinations should only be traded on stocks that are bullish.