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Comparision (SYNTHETIC LONG CALL VS SYNTHETIC LONG CALL)

 

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  SYNTHETIC LONG CALL SYNTHETIC LONG CALL
About Strategy

Synthetic Long Call Option Strategy

A trader is bullish in nature for short term, but also fearful about the downside risk associated with it. Here, a trader wants to hold an underlying asset either in physical form like in case of commodities or demat (electronic) form in case of stocks. But he is always exposed to downside risk and in order to mitigate his losses,

Synthetic Long Call Option Strategy

A trader is bullish in nature for short term, but also fearful about the downside risk associated with it. Here, a trader wants to hold an underlying asset either in physical form like in case of commodities or demat (electronic) form in case of stocks. But he is always exposed to downside risk and in order to mitigate his losses, ..

SYNTHETIC LONG CALL Vs SYNTHETIC LONG CALL - Details

SYNTHETIC LONG CALL SYNTHETIC LONG CALL
Market View Bullish Bullish
Type (CE/PE) CE (Call Option) CE (Call Option)
Number Of Positions 2 2
Strategy Level Beginners Beginners
Reward Profile When Price of Underlying > Purchase Price of Underlying + Premium Paid When Price of Underlying > Purchase Price of Underlying + Premium Paid
Risk Profile Limited (Maximum loss happens when the price of instrument move above from the strike price of put) Limited (Maximum loss happens when the price of instrument move above from the strike price of put)
Breakeven Point Underlying Price + Put Premium Underlying Price + Put Premium

SYNTHETIC LONG CALL Vs SYNTHETIC LONG CALL - When & How to use ?

SYNTHETIC LONG CALL SYNTHETIC LONG CALL
Market View Bullish Bullish
When to use? A trader is bullish in nature for short term, but also fearful about the downside risk associated with it. A trader is bullish in nature for short term, but also fearful about the downside risk associated with it.
Action Buy 1 ATM Put or OTM Put Buy 1 ATM Put or OTM Put
Breakeven Point Underlying Price + Put Premium Underlying Price + Put Premium

SYNTHETIC LONG CALL Vs SYNTHETIC LONG CALL - Risk & Reward

SYNTHETIC LONG CALL SYNTHETIC LONG CALL
Maximum Profit Scenario Current Price - Purchase Price - Premium Paid Current Price - Purchase Price - Premium Paid
Maximum Loss Scenario Premium Paid Premium Paid
Risk Limited Limited
Reward Unlimited Unlimited

SYNTHETIC LONG CALL Vs SYNTHETIC LONG CALL - Strategy Pros & Cons

SYNTHETIC LONG CALL SYNTHETIC LONG CALL
Similar Strategies Protective Put, Long Call Protective Put, Long Call
Disadvantage •Chances of loss if the underlying goes down. •Incur losses if option is exercised. •Chances of loss if the underlying goes down. •Incur losses if option is exercised.
Advantages •Limited risk, unlimited profit. •Protection to your long-term holdings. • Limited loss to the to the premium paid for Put option. •Limited risk, unlimited profit. •Protection to your long-term holdings. • Limited loss to the to the premium paid for Put option.

SYNTHETIC LONG CALL

SYNTHETIC LONG CALL