CALL BACKSPREAD	PROTECTIVE CALL
About Strategy	Call Backspread Option Trading  This strategy is adopted by traders who are bullish in nature. He expects market and volatility to rise in the near future. A trader need not be direction specific here (i.e. an upward or downward trend, but a small bias towards an uptrend should always be present, as the gains will be much higher once the market moves up r Read more..	Protective Call Option Strategy This strategy is simply the reversal of the Synthetic Call Strategy. This strategy is implemented when a trader is bearish on the market and expects to go down. Trader will short underlying stock in the cash market and buy either an ATM Call Option or OTM Call Option. The Call Option is bought to protect / hedge the upside risk on the short position. The .. Read more..

CALL BACKSPREAD Vs PROTECTIVE CALL - Details

	CALL BACKSPREAD	PROTECTIVE CALL
Market View	Bullish	Bearish
Type (CE/PE)	CE (Call Option)	CE (Call Option)
Number Of Positions	3	1
Strategy Level	Advance	Beginners
Reward Profile	Unlimited	Unlimited
Risk Profile	Limited	Limited
Breakeven Point	Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss	Sale Price of Underlying + Premium Paid

CALL BACKSPREAD Vs PROTECTIVE CALL - When & How to use ?

	CALL BACKSPREAD	PROTECTIVE CALL
Market View	Bullish	Bearish
When to use?	This strategy is used when the investor expects the price of the stock to rise in the future.	This strategy is implemented when a trader is bearish on the market and expects to go down.
Action	Sell 1 ITM Call, BUY 2 OTM Call	Buy 1 ATM Call
Breakeven Point	Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss	Sale Price of Underlying + Premium Paid

CALL BACKSPREAD Vs PROTECTIVE CALL - Risk & Reward

	CALL BACKSPREAD	PROTECTIVE CALL
Maximum Profit Scenario	Unlimited profit potential if the stock goes in upward direction.	Sale Price of Underlying - Price of Underlying - Premium Paid
Maximum Loss Scenario	Strike Price of long call - Strike Price of short call - Net premium received	Premium Paid + Call Strike Price - Sale Price of Underlying + Commissions Paid
Risk	Limited	Limited
Reward	Unlimited	Unlimited

CALL BACKSPREAD Vs PROTECTIVE CALL - Strategy Pros & Cons

	CALL BACKSPREAD	PROTECTIVE CALL
Similar Strategies	-	Put Backspread, Long Put
Disadvantage		• Profitable when market moves as expected. • Not good for beginners.
Advantages	• Unlimited profit potential.	• Limited risk if the market moves in opposite direction as expected. • Allows you to keep open a profitable position to make further profits. • Unlimited profit potential.