PROTECTIVE CALL	COVERED COMBINATION
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 Combination Option Strategy This strategy involves selling OTM Call & Put Options and buying the underlying asset in either cash or futures market. It is also known as Covered Strangle as the profits are capped and risk is potentially unlimited. Risk: Un .. Read more..

PROTECTIVE CALL Vs COVERED COMBINATION - Details

	PROTECTIVE CALL	COVERED COMBINATION
Market View	Bearish	Bullish
Type (CE/PE)	CE (Call Option)	CE (Call Option) + PE (Put 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 + Strike Price of Short Put - Net Premium Received) / 2

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

	PROTECTIVE CALL	COVERED COMBINATION
Market View	Bearish	Bullish
When to use?	This strategy is implemented when a trader is bearish on the market and expects to go down.	This strategy is mainly suited for investors who are moderately bullish on a stock and are comfortable with increasing their position in the event of a price decline.
Action	Buy 1 ATM Call	Sell 1 OTM Call, Sell 1 OTM Put
Breakeven Point	Sale Price of Underlying + Premium Paid	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

PROTECTIVE CALL Vs COVERED COMBINATION - Risk & Reward

	PROTECTIVE CALL	COVERED COMBINATION
Maximum Profit Scenario	Sale Price of Underlying - Price of Underlying - Premium Paid	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received - Commissions Paid
Maximum Loss Scenario	Premium Paid + Call Strike Price - Sale Price of Underlying + Commissions Paid	Purchase Price of Underlying + Strike Price of Short Put - (2 x Price of Underlying) - Max Profit + Commissions Paid
Risk	Limited	Unlimited
Reward	Unlimited	Limited

PROTECTIVE CALL Vs COVERED COMBINATION - Strategy Pros & Cons

	PROTECTIVE CALL	COVERED COMBINATION
Similar Strategies	Put Backspread, Long Put	Stock Repair Strategy
Disadvantage	• Profitable when market moves as expected. • Not good for beginners.	Combinations can be profitable in sideways or rising markets. Greater combined net credit increases downside protection and potential return.
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.	Limited Maximum Profit on the upside. Covered Combinations should only be traded on stocks that are bullish.