Compare Strategies
STOCK REPAIR | STOCK REPAIR | |
---|---|---|
About Strategy |
Stock Repair Option StrategyStock Repair Strategy is used to cover up for losses made on long stock position. After the long position suffered losses on stock price fall, a trader will implement this strategy in order to bring down the breakeven price and capping his further losses thereby increasing his probability of loss recovery. Suppose Mr. X has |
Stock Repair Option StrategyStock Repair Strategy is used to cover up for losses made on long stock position. After the long position suffered losses on stock price fall, a trader will implement this strategy in order to bring down the breakeven price and capping his further losses thereby increasing his probability of loss recovery. Suppose Mr. X has .. |
STOCK REPAIR Vs STOCK REPAIR - Details
STOCK REPAIR | STOCK REPAIR | |
---|---|---|
Market View | Bullish | Bullish |
Type (CE/PE) | CE (Call Option) | CE (Call Option) |
Number Of Positions | 3 | 3 |
Strategy Level | Beginners | Beginners |
Reward Profile | Unlimited | Unlimited |
Risk Profile | Limited | Limited |
Breakeven Point |
STOCK REPAIR Vs STOCK REPAIR - When & How to use ?
STOCK REPAIR | STOCK REPAIR | |
---|---|---|
Market View | Bullish | Bullish |
When to use? | Stock Repair Strategy is used to cover up for losses made on long stock position. After the long position suffered losses on stock price fall, a trader will implement this strategy in order to bring down the breakeven price and capping his further losses thereby increasing his probability of loss recovery. | Stock Repair Strategy is used to cover up for losses made on long stock position. After the long position suffered losses on stock price fall, a trader will implement this strategy in order to bring down the breakeven price and capping his further losses thereby increasing his probability of loss recovery. |
Action | Buy 1 ATM Call, Sell 2 OTM Calls | Buy 1 ATM Call, Sell 2 OTM Calls |
Breakeven Point |
STOCK REPAIR Vs STOCK REPAIR - Risk & Reward
STOCK REPAIR | STOCK REPAIR | |
---|---|---|
Maximum Profit Scenario | ||
Maximum Loss Scenario | ||
Risk | Limited | Limited |
Reward | Unlimited | Unlimited |
STOCK REPAIR Vs STOCK REPAIR - Strategy Pros & Cons
STOCK REPAIR | STOCK REPAIR | |
---|---|---|
Similar Strategies | ||
Disadvantage | • Management required with all the positions. • Additional loss due to continuous decline in shares as downside risk remains unchanged. | • Management required with all the positions. • Additional loss due to continuous decline in shares as downside risk remains unchanged. |
Advantages | • This strategy creates an opportunity to recover losses by lowering our breakeven. • No margin required. • No additional downside risk and costs nothing to put on. | • This strategy creates an opportunity to recover losses by lowering our breakeven. • No margin required. • No additional downside risk and costs nothing to put on. |