COVERED PUT	COVERED CALL
About Strategy	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 Call Option Strategy Mr. X owns Reliance Shares and expects the price to rise in the near future. Mr. X is entitled to receive dividends for the shares he hold in cash market. Covered Call Strategy involves selling of OTM Call Option of the same underlying asset. The OTM Call Option Strike Price will generally be the price, where Mr. X will look to get out o .. Read more..

COVERED PUT Vs COVERED CALL - Details

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

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

	COVERED PUT	COVERED CALL
Market View	Bearish	Bullish
When to use?	The Covered Put works well when the market is moderately Bearish.	An investor has a short term neutral view on the asset and for this reason holds the asset long and has a short position to generate income.
Action	Sell Underlying Sell OTM Put Option	(Buy Underlying) (Sell OTM Call Option)
Breakeven Point	Futures Price + Premium Received	Purchase Price of Underlying- Premium Received

COVERED PUT Vs COVERED CALL - Risk & Reward

	COVERED PUT	COVERED CALL
Maximum Profit Scenario	The profit happens when the price of the underlying moves above strike price of Short Put.	[Call Strike Price - Stock Price Paid] + Premium Received
Maximum Loss Scenario	Price of Underlying - Sale Price of Underlying - Premium Received	Purchase Price of Underlying - Price of Underlying) + Premium Received
Risk	Unlimited	Unlimited
Reward	Limited	Limited

COVERED PUT Vs COVERED CALL - Strategy Pros & Cons

	COVERED PUT	COVERED CALL
Similar Strategies	Bear Put Spread, Bear Call Spread	Bull Call Spread
Disadvantage	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.	• Unlimited risk, limited reward. • Inability to earn interest on the proceed used to buy the underlying stock.
Advantages	• 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.	• Profit from option premium, rise in the underlying stock and dividends on the stock. • Allows you to generate income from your holding. • Profit when underlying stock price rise, move sideways or marginal fall.