COVERED COMBINATION	COVERED PUT
About Strategy	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..	Covered Put Option Strategy  This strategy is exactly opposite to Covered Call Strategy. Here the investor is neutral or moderately bearish in nature and wants to take advantage of the price fall in the near future. The trader will short one lot of stock future. Now the trader will short ATM Put Option, the option strike price will be his exit price. If the prices rally above the strike price, the .. Read more..

COVERED COMBINATION Vs COVERED PUT - Details

	COVERED COMBINATION	COVERED PUT
Market View	Bullish	Bearish
Type (CE/PE)	CE (Call Option) + PE (Put Option)	PE (Put Option) + Underlying
Number Of Positions	2	2
Strategy Level	Advance	Advance
Reward Profile	Limited	Limited
Risk Profile	Unlimited	Unlimited
Breakeven Point	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2	Futures Price + Premium Received

COVERED COMBINATION Vs COVERED PUT - When & How to use ?

	COVERED COMBINATION	COVERED PUT
Market View	Bullish	Bearish
When to use?	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.	The Covered Put works well when the market is moderately Bearish.
Action	Sell 1 OTM Call, Sell 1 OTM Put	Sell Underlying Sell OTM Put Option
Breakeven Point	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2	Futures Price + Premium Received

COVERED COMBINATION Vs COVERED PUT - Risk & Reward

	COVERED COMBINATION	COVERED PUT
Maximum Profit Scenario	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received - Commissions Paid	The profit happens when the price of the underlying moves above strike price of Short Put.
Maximum Loss Scenario	Purchase Price of Underlying + Strike Price of Short Put - (2 x Price of Underlying) - Max Profit + Commissions Paid	Price of Underlying - Sale Price of Underlying - Premium Received
Risk	Unlimited	Unlimited
Reward	Limited	Limited

COVERED COMBINATION Vs COVERED PUT - Strategy Pros & Cons

	COVERED COMBINATION	COVERED PUT
Similar Strategies	Stock Repair Strategy	Bear Put Spread, Bear Call Spread
Disadvantage	Combinations can be profitable in sideways or rising markets. Greater combined net credit increases downside protection and potential return.	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.
Advantages	Limited Maximum Profit on the upside. Covered Combinations should only be traded on stocks that are bullish.	• Investors can book profit when underlying stock price drop, move sideways or rises by a small amount. • Able to generate monthly income. • Able to generate profit from fall in prices or mild increase in the prices.