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Comparision (LONG COMBO VS LONG COMBO)

 

Compare Strategies

  LONG COMBO LONG COMBO
About Strategy

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

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 ..

LONG COMBO Vs LONG COMBO - Details

LONG COMBO 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 Unlimited Unlimited
Risk Profile Unlimited Unlimited
Breakeven Point Call Strike + Net Premium Call Strike + Net Premium

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

LONG COMBO LONG COMBO
Market View Bullish Bullish
When to use? 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. 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 OTM Put Option, Buy OTM Call Option Sell OTM Put Option, Buy OTM Call Option
Breakeven Point Call Strike + Net Premium Call Strike + Net Premium

LONG COMBO Vs LONG COMBO - Risk & Reward

LONG COMBO LONG COMBO
Maximum Profit Scenario Underlying asset goes up and Call option exercised Underlying asset goes up and Call option exercised
Maximum Loss Scenario Underlying asset goes down and Put option exercised Underlying asset goes down and Put option exercised
Risk Unlimited Unlimited
Reward Unlimited Unlimited

LONG COMBO Vs LONG COMBO - Strategy Pros & Cons

LONG COMBO LONG COMBO
Similar Strategies - -
Disadvantage • Losses can keep on increasing as the price of stock goes down. • High risk strategy. • Losses can keep on increasing as the price of stock goes down. • High risk strategy.
Advantages • 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. • 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.

LONG COMBO

LONG COMBO