Compare Strategies
SHORT CALL | SHORT CALL | |
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About Strategy |
Short Call Option StrategyA trader shorts or writes a Call Option when he feels that underlying stock price is likely to go down. Selling Call Option is a strategy preferred for experienced traders. However this strategy is very risky in nature. If the stock rallies on the upside, your risk becomes potentially unquantifiable and unlimited. If the strategy |
Short Call Option StrategyA trader shorts or writes a Call Option when he feels that underlying stock price is likely to go down. Selling Call Option is a strategy preferred for experienced traders. However this strategy is very risky in nature. If the stock rallies on the upside, your risk becomes potentially unquantifiable and unlimited. If the strategy .. |
SHORT CALL Vs SHORT CALL - Details
SHORT CALL | SHORT CALL | |
---|---|---|
Market View | Bearish | Bearish |
Type (CE/PE) | CE (Call Option) | CE (Call Option) |
Number Of Positions | 1 | 1 |
Strategy Level | Advance | Advance |
Reward Profile | Limited | Limited |
Risk Profile | Unlimited | Unlimited |
Breakeven Point | Strike Price of Short Call + Premium Received | Strike Price of Short Call + Premium Received |
SHORT CALL Vs SHORT CALL - When & How to use ?
SHORT CALL | SHORT CALL | |
---|---|---|
Market View | Bearish | Bearish |
When to use? | It is an aggressive strategy and involves huge risks. It should be used only in case where trader is certain about the bearish market view on the underlying. | It is an aggressive strategy and involves huge risks. It should be used only in case where trader is certain about the bearish market view on the underlying. |
Action | Sell or Write Call Option | Sell or Write Call Option |
Breakeven Point | Strike Price of Short Call + Premium Received | Strike Price of Short Call + Premium Received |
SHORT CALL Vs SHORT CALL - Risk & Reward
SHORT CALL | SHORT CALL | |
---|---|---|
Maximum Profit Scenario | Max Profit = Premium Received | Max Profit = Premium Received |
Maximum Loss Scenario | Loss Occurs When Price of Underlying > Strike Price of Short Call + Premium Received | Loss Occurs When Price of Underlying > Strike Price of Short Call + Premium Received |
Risk | Unlimited | Unlimited |
Reward | Limited | Limited |
SHORT CALL Vs SHORT CALL - Strategy Pros & Cons
SHORT CALL | SHORT CALL | |
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Similar Strategies | Covered Put, Covered Calls | Covered Put, Covered Calls |
Disadvantage | • Unlimited risk to the upside underlying stocks. • Potential loss more than the premium collected. | • Unlimited risk to the upside underlying stocks. • Potential loss more than the premium collected. |
Advantages | • With the help of this strategy, traders can book profit from falling prices in the underlying asset. • Less investment, more profit. • Traders can book profit when underlying stock price fall, move sideways or rise by a small amount. | • With the help of this strategy, traders can book profit from falling prices in the underlying asset. • Less investment, more profit. • Traders can book profit when underlying stock price fall, move sideways or rise by a small amount. |