COVERED CALL	LONG COMBO
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..	Long Combo Option Strategy  Long Combo Option Trading Strategy is implemented when a trader is bullish in nature and expects the stock price to rise in the near future. Here a trader will sell one ‘Out of the Money’ Put Option and buy one ‘Out of the Money’ Call Option. This trade will require less capital to implement since the amount required to buy the call will be covered by the amount received .. Read more..

COVERED CALL Vs LONG COMBO - Details

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

COVERED CALL Vs LONG COMBO - When & How to use ?

	COVERED CALL	LONG COMBO
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 Bullish on an underlying but don't have the required capital or the risk appetite to invest directly into it.
Action	(Buy Underlying) (Sell OTM Call Option)	Sell OTM Put Option, Buy OTM Call Option
Breakeven Point	Purchase Price of Underlying- Premium Received	Call Strike + Net Premium

COVERED CALL Vs LONG COMBO - Risk & Reward

	COVERED CALL	LONG COMBO
Maximum Profit Scenario	[Call Strike Price - Stock Price Paid] + Premium Received	Underlying asset goes up and Call option exercised
Maximum Loss Scenario	Purchase Price of Underlying - Price of Underlying) + Premium Received	Underlying asset goes down and Put option exercised
Risk	Unlimited	Unlimited
Reward	Limited	Unlimited

COVERED CALL Vs LONG COMBO - Strategy Pros & Cons

	COVERED CALL	LONG COMBO
Similar Strategies	Bull Call Spread	-
Disadvantage	• Unlimited risk, limited reward. • Inability to earn interest on the proceed used to buy the underlying stock.	• Losses can keep on increasing as the price of stock goes down. • High risk strategy.
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.	• Capital investment is low and returns are high. • Unlimited reward, returns keep on increasing with the increase on stock price. • Leverage facility provided by this strategy is very beneficial.