Compare Strategies
| SHORT CALL | SHORT PUT | |
|---|---|---|
|   |   | |
| About Strategy | Short Call Option StrategyA 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                                         | Short Put Option StrategyA trader will short put if he is bullish in nature and expects the underlying asset not to fall below a certain level. Risk: Losses will be potentially unlimited if the stock skyrockets above the strike price of put. | 
SHORT CALL Vs SHORT PUT - Details
| SHORT CALL | SHORT PUT | |
|---|---|---|
| Market View | Bearish | Bullish | 
| Type (CE/PE) | CE (Call Option) | PE (Put Option) | 
| Number Of Positions | 1 | 1 | 
| Strategy Level | Advance | Beginners | 
| Reward Profile | Limited | Limited | 
| Risk Profile | Unlimited | Unlimited | 
| Breakeven Point | Strike Price of Short Call + Premium Received | Strike Price - Premium | 
SHORT CALL Vs SHORT PUT - When & How to use ?
| SHORT CALL | SHORT PUT | |
|---|---|---|
| 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 works well when you're Bullish that the price of the underlying will not fall beyond a certain level. | 
| Action | Sell or Write Call Option | Sell Put Option | 
| Breakeven Point | Strike Price of Short Call + Premium Received | Strike Price - Premium | 
SHORT CALL Vs SHORT PUT - Risk & Reward
| SHORT CALL | SHORT PUT | |
|---|---|---|
| Maximum Profit Scenario | Max Profit = Premium Received | Premium received in your account when you sell the Put Option. | 
| Maximum Loss Scenario | Loss Occurs When Price of Underlying > Strike Price of Short Call + Premium Received | Unlimited (When the price of the underlying falls.) | 
| Risk | Unlimited | Unlimited | 
| Reward | Limited | Limited | 
SHORT CALL Vs SHORT PUT - Strategy Pros & Cons
| SHORT CALL | SHORT PUT | |
|---|---|---|
| Similar Strategies | Covered Put, Covered Calls | Bull Put Spread, Short Starddle | 
| Disadvantage | • Unlimited risk to the upside underlying stocks. • Potential loss more than the premium collected. | • Unlimited risk. • Huge losses if the price of the underlying stock falls steeply. | 
| 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. | • Benefit from time decay. • Less capital required than buying the stock outright. • Profit when underlying stock price rise, move sideways or drop by a relatively small account. |