CALL BACKSPREAD	COVERED PUT
About Strategy	Call Backspread Option Trading  This strategy is adopted by traders who are bullish in nature. He expects market and volatility to rise in the near future. A trader need not be direction specific here (i.e. an upward or downward trend, but a small bias towards an uptrend should always be present, as the gains will be much higher once the market moves up r Read more..	Covered Put Option Strategy  This strategy is exactly opposite to Covered Call Strategy. Here the investor is neutral or moderately bearish in nature and wants to take advantage of the price fall in the near future. The trader will short one lot of stock future. Now the trader will short ATM Put Option, the option strike price will be his exit price. If the prices rally above the strike price, the .. Read more..

CALL BACKSPREAD Vs COVERED PUT - Details

	CALL BACKSPREAD	COVERED PUT
Market View	Bullish	Bearish
Type (CE/PE)	CE (Call Option)	PE (Put Option) + Underlying
Number Of Positions	3	2
Strategy Level	Advance	Advance
Reward Profile	Unlimited	Limited
Risk Profile	Limited	Unlimited
Breakeven Point	Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss	Futures Price + Premium Received

CALL BACKSPREAD Vs COVERED PUT - When & How to use ?

	CALL BACKSPREAD	COVERED PUT
Market View	Bullish	Bearish
When to use?	This strategy is used when the investor expects the price of the stock to rise in the future.	The Covered Put works well when the market is moderately Bearish.
Action	Sell 1 ITM Call, BUY 2 OTM Call	Sell Underlying Sell OTM Put Option
Breakeven Point	Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss	Futures Price + Premium Received

CALL BACKSPREAD Vs COVERED PUT - Risk & Reward

	CALL BACKSPREAD	COVERED PUT
Maximum Profit Scenario	Unlimited profit potential if the stock goes in upward direction.	The profit happens when the price of the underlying moves above strike price of Short Put.
Maximum Loss Scenario	Strike Price of long call - Strike Price of short call - Net premium received	Price of Underlying - Sale Price of Underlying - Premium Received
Risk	Limited	Unlimited
Reward	Unlimited	Limited

CALL BACKSPREAD Vs COVERED PUT - Strategy Pros & Cons

	CALL BACKSPREAD	COVERED PUT
Similar Strategies	-	Bear Put Spread, Bear Call Spread
Disadvantage		• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.
Advantages	• Unlimited profit potential.	• Investors can book profit when underlying stock price drop, move sideways or rises by a small amount. • Able to generate monthly income. • Able to generate profit from fall in prices or mild increase in the prices.