SHORT CALL	RISK REVERSAL
About Strategy	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..	Risk Reversal Option Strategy This strategy protects an investor from unfavourable price movements in the position but limits the profits can be made on that position. A risk reversal is a hedging strategy that protects a long or short position by using put and call options. In this one option is buying and other is written. In this strategy the trader has to pay a premium, while the written option prod .. Read more..

SHORT CALL Vs RISK REVERSAL - Details

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

SHORT CALL Vs RISK REVERSAL - When & How to use ?

	SHORT CALL	RISK REVERSAL
Market View	Bearish	Bullish
When to use?	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.	This strategy can be used for hedging. When an investor want to protect long or short position by using a call and put option.
Action	Sell or Write Call Option	This strategy work when an investor want to hedge their position by buying a put option and selling a call option.
Breakeven Point	Strike Price of Short Call + Premium Received	Premium received - Put Strike Price

SHORT CALL Vs RISK REVERSAL - Risk & Reward

	SHORT CALL	RISK REVERSAL
Maximum Profit Scenario	Max Profit = Premium Received	You have unlimited profit potential to the upside.
Maximum Loss Scenario	Loss Occurs When Price of Underlying > Strike Price of Short Call + Premium Received	You have nearly unlimited downside risk as well because you are short the put
Risk	Unlimited	Unlimited
Reward	Limited	Unlimited

SHORT CALL Vs RISK REVERSAL - Strategy Pros & Cons

	SHORT CALL	RISK REVERSAL
Similar Strategies	Covered Put, Covered Calls	-
Disadvantage	• Unlimited risk to the upside underlying stocks. • Potential loss more than the premium collected.	Unlimited Risk.
Advantages	• 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.	Unlimited profit.