SHORT STRADDLE	COVERED COMBINATION
About Strategy	Short Straddle Option strategy This strategy is just the opposite of Long Straddle. A trader should adopt this strategy when he expects less volatility in the near future. Here, a trader will sell one Call Option & one Put Option of the same strike price, same expiry date and of the same underlying asset. If the stock/index hovers around the same levels then both the options will expire worthless an 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..

SHORT STRADDLE Vs COVERED COMBINATION - Details

	SHORT STRADDLE	COVERED COMBINATION
Market View	Neutral	Bullish
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	2	2
Strategy Level	Advance	Advance
Reward Profile	Limited	Limited
Risk Profile	Unlimited	Unlimited
Breakeven Point	Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call+ Net Premium	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

SHORT STRADDLE Vs COVERED COMBINATION - When & How to use ?

	SHORT STRADDLE	COVERED COMBINATION
Market View	Neutral	Bullish
When to use?	This strategy is work well when an investor expect a flat market in the coming days with very less movement in the prices of underlying asset.	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	Sell Call Option, Sell Put Option	Sell 1 OTM Call, Sell 1 OTM Put
Breakeven Point	Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call+ Net Premium	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

SHORT STRADDLE Vs COVERED COMBINATION - Risk & Reward

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

SHORT STRADDLE Vs COVERED COMBINATION - Strategy Pros & Cons

	SHORT STRADDLE	COVERED COMBINATION
Similar Strategies	Short Strangle	Stock Repair Strategy
Disadvantage	• Unlimited risk. • If the price of the underlying asset moves in either direction then huge losses can occur.	Combinations can be profitable in sideways or rising markets. Greater combined net credit increases downside protection and potential return.
Advantages	• A trader can earn profit even when there is no volatility in the market . • Allows you to benefit from double time decay. • Trader can collect premium from puts and calls option .	Limited Maximum Profit on the upside. Covered Combinations should only be traded on stocks that are bullish.