STRIP	COVERED CALL
About Strategy	Strip Option Strategy Strip Strategy is the opposite of Strap Strategy. When a trader is bearish on the market and bullish on volatility then he will implement this strategy by buying two ATM Put Options & one ATM Call Option, of the same strike price, expiry date & underlying asset. If the prices move downwards then this strategy will make more profits compared to short straddle because of 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..

STRIP Vs COVERED CALL - Details

	STRIP	COVERED CALL
Market View	Neutral	Bullish
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option)
Number Of Positions	3	2
Strategy Level	Beginners	Advance
Reward Profile	Unlimited	Limited
Risk Profile	Limited	Unlimited
Breakeven Point	Upper Breakeven Point = Strike Price of Calls/Puts + Net Premium Paid, Lower Breakeven Point = Strike Price of Calls/Puts - (Net Premium Paid/2)	Purchase Price of Underlying- Premium Received

STRIP Vs COVERED CALL - When & How to use ?

	STRIP	COVERED CALL
Market View	Neutral	Bullish
When to use?	When a trader is bearish on the market and bullish on volatility then he will implement this strategy.	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	Buy 1 ATM Call, Buy 2 ATM Puts	(Buy Underlying) (Sell OTM Call Option)
Breakeven Point	Upper Breakeven Point = Strike Price of Calls/Puts + Net Premium Paid, Lower Breakeven Point = Strike Price of Calls/Puts - (Net Premium Paid/2)	Purchase Price of Underlying- Premium Received

STRIP Vs COVERED CALL - Risk & Reward

	STRIP	COVERED CALL
Maximum Profit Scenario	Price of Underlying - Strike Price of Calls - Net Premium Paid OR 2 x (Strike Price of Puts - Price of Underlying) - Net Premium Paid	[Call Strike Price - Stock Price Paid] + Premium Received
Maximum Loss Scenario	Net Premium Paid + Commissions Paid	Purchase Price of Underlying - Price of Underlying) + Premium Received
Risk	Limited	Unlimited
Reward	Unlimited	Limited

STRIP Vs COVERED CALL - Strategy Pros & Cons

	STRIP	COVERED CALL
Similar Strategies	Strap, Short Put Ladder	Bull Call Spread
Disadvantage	Expensive., The share price must change significantly to generate profit., High Bid/Offer spread can have a negative influence on the position.	• Unlimited risk, limited reward. • Inability to earn interest on the proceed used to buy the underlying stock.
Advantages	Profit is generated when the share price changes in any direction., Limited loss., The profit is potentially unlimited when share prices are moving.	• 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.