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Comparision (LONG CALL VS LONG PUT)

 

Compare Strategies

  LONG CALL LONG PUT
About Strategy

Long Call Option Strategy

This is one of the basic strategies as it involves entering into one position i.e. buying the Call Option only. Any investor who buys the Call Option will be bullish in nature and would be expecting the market to give decent returns in the near future.

Long Put Option Strategy

This strategy is implemented by buying 1 Put Option i.e. a single position, when the person is bearish on the market and expects the market to move downwards in the near future.
Risk: The maximum loss will be the premium amount paid.< ..

LONG CALL Vs LONG PUT - Details

LONG CALL LONG PUT
Market View Bullish Bearish
Type (CE/PE) CE (Call Option) PE (Put Option)
Number Of Positions 1 1
Strategy Level Beginner Level Beginners
Reward Profile Unlimited Unlimited
Risk Profile Limited Limited
Breakeven Point Strike Price + Premium Strike Price of Long Put - Premium Paid

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

LONG CALL LONG PUT
Market View Bullish (Any investor who buys the Call Option will be bullish in nature and would be expecting the market to give decent returns in the near future.) Bearish
When to use? This strategy work when an investor expect the underlying instrument move in upward direction. A long put option strategy works well when you're expecting the underlying asset to sharply decline or be volatile in near future.
Action Buying Call option Buy Put Option
Breakeven Point Strike price + Premium Strike Price of Long Put - Premium Paid

LONG CALL Vs LONG PUT - Risk & Reward

LONG CALL LONG PUT
Maximum Profit Scenario Underlying Asset close above from the strike price on expiry. Profit = Strike Price of Long Put - Premium Paid
Maximum Loss Scenario Premium Paid Max Loss = Premium Paid + Commissions Paid
Risk Limited Limited
Reward Unlimited Unlimited

LONG CALL Vs LONG PUT - Strategy Pros & Cons

LONG CALL LONG PUT
Similar Strategies Protective Put Protective Call, Short Put
Disadvantage • In this strategy, there is not protection against the underlying stock falling in value. • 100% loss if the strike price, expiration dates or underlying stocks are badly chosen. • 100% loss if strike price, expiration dates or underlying stocks are badly chosen. • Time decay.
Advantages • Less investment, more profit. • Unlimited profit with limited risk. • High leverage than simply owning the stock. • Limited risk to the premium paid. • Less capital investment and more profit. • Unlimited profit potential with limited risk.

LONG CALL

LONG PUT