LONG PUT	COVERED CALL
About Strategy	Long Put Option Strategy This strategy is implemented by buying 1 Put Option i.e. a single position, when the person is bearish on the market and expects the market to move downwards in the near future. Risk: The maximum loss will be the premium amount paid.< 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..

LONG PUT Vs COVERED CALL - Details

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

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

	LONG PUT	COVERED CALL
Market View	Bearish	Bullish
When to use?	A long put option strategy works well when you're expecting the underlying asset to sharply decline or be volatile in near future.	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 Put Option	(Buy Underlying) (Sell OTM Call Option)
Breakeven Point	Strike Price of Long Put - Premium Paid	Purchase Price of Underlying- Premium Received

LONG PUT Vs COVERED CALL - Risk & Reward

	LONG PUT	COVERED CALL
Maximum Profit Scenario	Profit = Strike Price of Long Put - Premium Paid	[Call Strike Price - Stock Price Paid] + Premium Received
Maximum Loss Scenario	Max Loss = Premium Paid + Commissions Paid	Purchase Price of Underlying - Price of Underlying) + Premium Received
Risk	Limited	Unlimited
Reward	Unlimited	Limited

LONG PUT Vs COVERED CALL - Strategy Pros & Cons

	LONG PUT	COVERED CALL
Similar Strategies	Protective Call, Short Put	Bull Call Spread
Disadvantage	• 100% loss if strike price, expiration dates or underlying stocks are badly chosen. • Time decay.	• Unlimited risk, limited reward. • Inability to earn interest on the proceed used to buy the underlying stock.
Advantages	• Limited risk to the premium paid. • Less capital investment and more profit. • Unlimited profit potential with limited risk.	• 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.