COVERED CALL	CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY
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..	Christmas Tree Spread with Call Option Strategy This Strategy is an advance option strategy that consists of three legs and six total options. In this strategy buying one call at strike price A, skipping strike price B, writes three calls at strike price C, and buying two calls at strike price D for same expiration dates for neutral to bullish forecast. An investor used this strategy to potential retur .. Read more..

COVERED CALL Vs CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY - Details

	COVERED CALL	CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY
Market View	Bullish	Bullish
Type (CE/PE)	CE (Call Option)	CE (Call Option)
Number Of Positions	2	4
Strategy Level	Advance	Advance
Reward Profile	Limited	Limited
Risk Profile	Unlimited	Limited
Breakeven Point	Purchase Price of Underlying- Premium Received	Lowest strike prices + premium paid – the half premium.

COVERED CALL Vs CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY - When & How to use ?

	COVERED CALL	CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY
Market View	Bullish	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.	This Strategy is used when an investor wants potential returns.
Action	(Buy Underlying) (Sell OTM Call Option)	• Buy 1 call , • Sell 3 calls, • Buy 2 calls
Breakeven Point	Purchase Price of Underlying- Premium Received	Lowest strike prices + premium paid – the half premium.

COVERED CALL Vs CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY - Risk & Reward

	COVERED CALL	CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY
Maximum Profit Scenario	[Call Strike Price - Stock Price Paid] + Premium Received	Equal middle strike price – lower strike price – the premium
Maximum Loss Scenario	Purchase Price of Underlying - Price of Underlying) + Premium Received	Net Debit paid for the strategy.
Risk	Unlimited	Limited
Reward	Limited	Limited

COVERED CALL Vs CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY - Strategy Pros & Cons

	COVERED CALL	CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY
Similar Strategies	Bull Call Spread	CHRISTMAS TREE SPREAD WITH PUT OPTION
Disadvantage	• Unlimited risk, limited reward. • Inability to earn interest on the proceed used to buy the underlying stock.	• Potential profit is lower or limited.
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.	• The potential of loss is limited.