COVERED COMBINATION	LONG COMBO
About Strategy	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..	Long Combo Option Strategy  Long Combo Option Trading Strategy is implemented when a trader is bullish in nature and expects the stock price to rise in the near future. Here a trader will sell one ‘Out of the Money’ Put Option and buy one ‘Out of the Money’ Call Option. This trade will require less capital to implement since the amount required to buy the call will be covered by the amount received .. Read more..

COVERED COMBINATION Vs LONG COMBO - Details

	COVERED COMBINATION	LONG COMBO
Market View	Bullish	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	Unlimited
Risk Profile	Unlimited	Unlimited
Breakeven Point	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2	Call Strike + Net Premium

COVERED COMBINATION Vs LONG COMBO - When & How to use ?

	COVERED COMBINATION	LONG COMBO
Market View	Bullish	Bullish
When to use?	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.	This strategy is used when an investor Bullish on an underlying but don't have the required capital or the risk appetite to invest directly into it.
Action	Sell 1 OTM Call, Sell 1 OTM Put	Sell OTM Put Option, Buy OTM Call Option
Breakeven Point	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2	Call Strike + Net Premium

COVERED COMBINATION Vs LONG COMBO - Risk & Reward

	COVERED COMBINATION	LONG COMBO
Maximum Profit Scenario	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received - Commissions Paid	Underlying asset goes up and Call option exercised
Maximum Loss Scenario	Purchase Price of Underlying + Strike Price of Short Put - (2 x Price of Underlying) - Max Profit + Commissions Paid	Underlying asset goes down and Put option exercised
Risk	Unlimited	Unlimited
Reward	Limited	Unlimited

COVERED COMBINATION Vs LONG COMBO - Strategy Pros & Cons

	COVERED COMBINATION	LONG COMBO
Similar Strategies	Stock Repair Strategy	-
Disadvantage	Combinations can be profitable in sideways or rising markets. Greater combined net credit increases downside protection and potential return.	• Losses can keep on increasing as the price of stock goes down. • High risk strategy.
Advantages	Limited Maximum Profit on the upside. Covered Combinations should only be traded on stocks that are bullish.	• Capital investment is low and returns are high. • Unlimited reward, returns keep on increasing with the increase on stock price. • Leverage facility provided by this strategy is very beneficial.