Compare Strategies
LONG PUT | LONG CALL | |
---|---|---|
![]() |
![]() |
|
About Strategy |
Long Put Option StrategyThis strategy is implemented by buying 1 Put Option i.e. a single position, when the person is bearish on the market and expects the market to move downwards in the near future. |
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:
|
LONG PUT Vs LONG CALL - Details
LONG PUT | LONG CALL | |
---|---|---|
Market View | Bearish | Bullish |
Type (CE/PE) | PE (Put Option) | CE (Call Option) |
Number Of Positions | 1 | 1 |
Strategy Level | Beginners | Beginner Level |
Reward Profile | Unlimited | Unlimited |
Risk Profile | Limited | Limited |
Breakeven Point | Strike Price of Long Put - Premium Paid | Strike Price + Premium |
LONG PUT Vs LONG CALL - When & How to use ?
LONG PUT | LONG CALL | |
---|---|---|
Market View | Bearish | 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.) |
When to use? | A long put option strategy works well when you're expecting the underlying asset to sharply decline or be volatile in near future. | This strategy work when an investor expect the underlying instrument move in upward direction. |
Action | Buy Put Option | Buying Call option |
Breakeven Point | Strike Price of Long Put - Premium Paid | Strike price + Premium |
LONG PUT Vs LONG CALL - Risk & Reward
LONG PUT | LONG CALL | |
---|---|---|
Maximum Profit Scenario | Profit = Strike Price of Long Put - Premium Paid | Underlying Asset close above from the strike price on expiry. |
Maximum Loss Scenario | Max Loss = Premium Paid + Commissions Paid | Premium Paid |
Risk | Limited | Limited |
Reward | Unlimited | Unlimited |
LONG PUT Vs LONG CALL - Strategy Pros & Cons
LONG PUT | LONG CALL | |
---|---|---|
Similar Strategies | Protective Call, Short Put | Protective Put |
Disadvantage | • 100% loss if strike price, expiration dates or underlying stocks are badly chosen. • Time decay. | • 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. |
Advantages | • Limited risk to the premium paid. • Less capital investment and more profit. • Unlimited profit potential with limited risk. | • Less investment, more profit. • Unlimited profit with limited risk. • High leverage than simply owning the stock. |