COVERED PUT	LONG COMBO
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..	Long Combo Option Strategy  Long Combo Option Trading Strategy is implemented when a trader is bullish in nature and expects the stock price to rise in the near future. Here a trader will sell one ‘Out of the Money’ Put Option and buy one ‘Out of the Money’ Call Option. This trade will require less capital to implement since the amount required to buy the call will be covered by the amount received .. Read more..

COVERED PUT Vs LONG COMBO - Details

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

COVERED PUT Vs LONG COMBO - When & How to use ?

	COVERED PUT	LONG COMBO
Market View	Bearish	Bullish
When to use?	The Covered Put works well when the market is moderately Bearish.	This strategy is used when an investor Bullish on an underlying but don't have the required capital or the risk appetite to invest directly into it.
Action	Sell Underlying Sell OTM Put Option	Sell OTM Put Option, Buy OTM Call Option
Breakeven Point	Futures Price + Premium Received	Call Strike + Net Premium

COVERED PUT Vs LONG COMBO - Risk & Reward

	COVERED PUT	LONG COMBO
Maximum Profit Scenario	The profit happens when the price of the underlying moves above strike price of Short Put.	Underlying asset goes up and Call option exercised
Maximum Loss Scenario	Price of Underlying - Sale Price of Underlying - Premium Received	Underlying asset goes down and Put option exercised
Risk	Unlimited	Unlimited
Reward	Limited	Unlimited

COVERED PUT Vs LONG COMBO - Strategy Pros & Cons

	COVERED PUT	LONG COMBO
Similar Strategies	Bear Put Spread, Bear Call Spread	-
Disadvantage	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.	• Losses can keep on increasing as the price of stock goes down. • High risk strategy.
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.	• Capital investment is low and returns are high. • Unlimited reward, returns keep on increasing with the increase on stock price. • Leverage facility provided by this strategy is very beneficial.