Compare Strategies
| STOCK REPAIR | MARRIED PUT | |
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| About Strategy |
Stock Repair Option StrategyStock Repair Strategy is used to cover up for losses made on long stock position. After the long position suffered losses on stock price fall, a trader will implement this strategy in order to bring down the breakeven price and capping his further losses thereby increasing his probability of loss recovery. Suppose Mr. X has |
Married Put Option StrategyThis strategy is applied when trader goes long on the underlying asset i.e. he buys the stock in cash market. He has a bullish view and expects the market to rise in the near future, but simultaneously has the fear of downward movement of the markets. In order to cover his position from vulnerabilities he buys one ATM Put Option of the same underlying asset. Here, a trader wi .. |
STOCK REPAIR Vs MARRIED PUT - Details
| STOCK REPAIR | MARRIED PUT | |
|---|---|---|
| Market View | Bullish | Bullish |
| Type (CE/PE) | CE (Call Option) | PE (Put Option) |
| Number Of Positions | 3 | 1 |
| Strategy Level | Beginners | Beginners |
| Reward Profile | Unlimited | Unlimited |
| Risk Profile | Limited | Limited |
| Breakeven Point | Purchase Price of Underlying + Premium Paid |
STOCK REPAIR Vs MARRIED PUT - When & How to use ?
| STOCK REPAIR | MARRIED PUT | |
|---|---|---|
| Market View | Bullish | Bullish |
| When to use? | Stock Repair Strategy is used to cover up for losses made on long stock position. After the long position suffered losses on stock price fall, a trader will implement this strategy in order to bring down the breakeven price and capping his further losses thereby increasing his probability of loss recovery. | This Strategy work when the investor goes long in any stock. He expects the rise in market in future. |
| Action | Buy 1 ATM Call, Sell 2 OTM Calls | Buy 250 XYZ Shares, Buy 1 ATM Put Option |
| Breakeven Point | Purchase Price of Underlying + Premium Paid |
STOCK REPAIR Vs MARRIED PUT - Risk & Reward
| STOCK REPAIR | MARRIED PUT | |
|---|---|---|
| Maximum Profit Scenario | Profit = Price of Underlying - Purchase Price of Underlying - Premium Paid | |
| Maximum Loss Scenario | Max Loss = Premium Paid + Commissions Paid | |
| Risk | Limited | Limited |
| Reward | Unlimited | Unlimited |
STOCK REPAIR Vs MARRIED PUT - Strategy Pros & Cons
| STOCK REPAIR | MARRIED PUT | |
|---|---|---|
| Similar Strategies | Long Call | |
| Disadvantage | • Management required with all the positions. • Additional loss due to continuous decline in shares as downside risk remains unchanged. | Cost of the put options eats into profit margin. |
| Advantages | • This strategy creates an opportunity to recover losses by lowering our breakeven. • No margin required. • No additional downside risk and costs nothing to put on. | Unlimited Profit and Limited Risk |