PUT BACKSPREAD	COVERED CALL
About Strategy	Put Backspread Option Strategy If the trader is bearish on market and bullish in volatility, he will implement this strategy. However the trader can be neutral in nature i.e. indifferent if the market moves in either of the direction, this strategy will make profits, but uptrend will give a capped income than downtrend which will give unlimited returns. Read more..	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..

PUT BACKSPREAD Vs COVERED CALL - Details

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

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

	PUT BACKSPREAD	COVERED CALL
Market View	Bearish	Bullish
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.
Action		(Buy Underlying) (Sell OTM Call Option)
Breakeven Point		Purchase Price of Underlying- Premium Received

PUT BACKSPREAD Vs COVERED CALL - Risk & Reward

	PUT BACKSPREAD	COVERED CALL
Maximum Profit Scenario		[Call Strike Price - Stock Price Paid] + Premium Received
Maximum Loss Scenario		Purchase Price of Underlying - Price of Underlying) + Premium Received
Risk	Limited	Unlimited
Reward	Unlimited	Limited

PUT BACKSPREAD Vs COVERED CALL - Strategy Pros & Cons

	PUT BACKSPREAD	COVERED CALL
Similar Strategies		Bull Call Spread
Disadvantage		• Unlimited risk, limited reward. • Inability to earn interest on the proceed used to buy the underlying stock.
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.