Compare Strategies
LONG CALL | LONG COMBO | |
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About Strategy |
Long Call Option StrategyThis is one of the basic strategies as it involves entering into one position i.e. buying the Call Option only. Any investor who buys the Call Option will be bullish in nature and would be expecting the market to give decent returns in the near future. Risk:
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Long Combo Option StrategyLong 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 .. |
LONG CALL Vs LONG COMBO - Details
LONG CALL | LONG COMBO | |
---|---|---|
Market View | Bullish | Bullish |
Type (CE/PE) | CE (Call Option) | CE (Call Option) + PE (Put Option) |
Number Of Positions | 1 | 2 |
Strategy Level | Beginner Level | Advance |
Reward Profile | Unlimited | Unlimited |
Risk Profile | Limited | Unlimited |
Breakeven Point | Strike Price + Premium | Call Strike + Net Premium |
LONG CALL Vs LONG COMBO - When & How to use ?
LONG CALL | LONG COMBO | |
---|---|---|
Market View | Bullish (Any investor who buys the Call Option will be bullish in nature and would be expecting the market to give decent returns in the near future.) | Bullish |
When to use? | This strategy work when an investor expect the underlying instrument move in upward direction. | 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 | Buying Call option | Sell OTM Put Option, Buy OTM Call Option |
Breakeven Point | Strike price + Premium | Call Strike + Net Premium |
LONG CALL Vs LONG COMBO - Risk & Reward
LONG CALL | LONG COMBO | |
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Maximum Profit Scenario | Underlying Asset close above from the strike price on expiry. | Underlying asset goes up and Call option exercised |
Maximum Loss Scenario | Premium Paid | Underlying asset goes down and Put option exercised |
Risk | Limited | Unlimited |
Reward | Unlimited | Unlimited |
LONG CALL Vs LONG COMBO - Strategy Pros & Cons
LONG CALL | LONG COMBO | |
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Similar Strategies | Protective Put | - |
Disadvantage | • In this strategy, there is not protection against the underlying stock falling in value. • 100% loss if the strike price, expiration dates or underlying stocks are badly chosen. | • Losses can keep on increasing as the price of stock goes down. • High risk strategy. |
Advantages | • Less investment, more profit. • Unlimited profit with limited risk. • High leverage than simply owning the stock. | • 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. |