PROTECTIVE CALL	COVERED CALL
About Strategy	Protective Call Option Strategy This strategy is simply the reversal of the Synthetic Call Strategy. This strategy is implemented when a trader is bearish on the market and expects to go down. Trader will short underlying stock in the cash market and buy either an ATM Call Option or OTM Call Option. The Call Option is bought to protect / hedge the upside risk on the short position. The 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..

PROTECTIVE CALL Vs COVERED CALL - Details

	PROTECTIVE CALL	COVERED CALL
Market View	Bearish	Bullish
Type (CE/PE)	CE (Call Option)	CE (Call Option)
Number Of Positions	1	2
Strategy Level	Beginners	Advance
Reward Profile	Unlimited	Limited
Risk Profile	Limited	Unlimited
Breakeven Point	Sale Price of Underlying + Premium Paid	Purchase Price of Underlying- Premium Received

PROTECTIVE CALL Vs COVERED CALL - When & How to use ?

	PROTECTIVE CALL	COVERED CALL
Market View	Bearish	Bullish
When to use?	This strategy is implemented when a trader is bearish on the market and expects to go down.	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 1 ATM Call	(Buy Underlying) (Sell OTM Call Option)
Breakeven Point	Sale Price of Underlying + Premium Paid	Purchase Price of Underlying- Premium Received

PROTECTIVE CALL Vs COVERED CALL - Risk & Reward

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

PROTECTIVE CALL Vs COVERED CALL - Strategy Pros & Cons

	PROTECTIVE CALL	COVERED CALL
Similar Strategies	Put Backspread, Long Put	Bull Call Spread
Disadvantage	• Profitable when market moves as expected. • Not good for beginners.	• Unlimited risk, limited reward. • Inability to earn interest on the proceed used to buy the underlying stock.
Advantages	• Limited risk if the market moves in opposite direction as expected. • Allows you to keep open a profitable position to make further profits. • Unlimited profit potential.	• 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.