LONG COMBO	COVERED COMBINATION
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 Read more..	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 Vs COVERED COMBINATION - Details

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

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

	LONG COMBO	COVERED COMBINATION
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 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.
Action	Sell OTM Put Option, Buy OTM Call Option	Sell 1 OTM Call, Sell 1 OTM Put
Breakeven Point	Call Strike + Net Premium	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

LONG COMBO Vs COVERED COMBINATION - Risk & Reward

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

LONG COMBO Vs COVERED COMBINATION - Strategy Pros & Cons

	LONG COMBO	COVERED COMBINATION
Similar Strategies	-	Stock Repair Strategy
Disadvantage	• Losses can keep on increasing as the price of stock goes down. • High risk strategy.	Combinations can be profitable in sideways or rising markets. Greater combined net credit increases downside protection and potential return.
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.	Limited Maximum Profit on the upside. Covered Combinations should only be traded on stocks that are bullish.