Compare Strategies
| LONG CALL | MARRIED PUT | |
|---|---|---|
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| About Strategy |
Long Call Option StrategyThis 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. Risk:
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Married Put Option StrategyThis strategy is applied when trader goes long on the underlying asset i.e. he buys the stock in cash market. He has a bullish view and expects the market to rise in the near future, but simultaneously has the fear of downward movement of the markets. In order to cover his position from vulnerabilities he buys one ATM Put Option of the same underlying asset. Here, a trader wi .. |
LONG CALL Vs MARRIED PUT - Details
| LONG CALL | MARRIED PUT | |
|---|---|---|
| Market View | Bullish | Bullish |
| 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 | Purchase Price of Underlying + Premium Paid |
LONG CALL Vs MARRIED PUT - When & How to use ?
| LONG CALL | MARRIED 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.) | Bullish |
| When to use? | This strategy work when an investor expect the underlying instrument move in upward direction. | This Strategy work when the investor goes long in any stock. He expects the rise in market in future. |
| Action | Buying Call option | Buy 250 XYZ Shares, Buy 1 ATM Put Option |
| Breakeven Point | Strike price + Premium | Purchase Price of Underlying + Premium Paid |
LONG CALL Vs MARRIED PUT - Risk & Reward
| LONG CALL | MARRIED PUT | |
|---|---|---|
| Maximum Profit Scenario | Underlying Asset close above from the strike price on expiry. | Profit = Price of Underlying - Purchase Price of Underlying - Premium Paid |
| Maximum Loss Scenario | Premium Paid | Max Loss = Premium Paid + Commissions Paid |
| Risk | Limited | Limited |
| Reward | Unlimited | Unlimited |
LONG CALL Vs MARRIED PUT - Strategy Pros & Cons
| LONG CALL | MARRIED PUT | |
|---|---|---|
| Similar Strategies | Protective Put | Long Call |
| 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. | Cost of the put options eats into profit margin. |
| Advantages | • Less investment, more profit. • Unlimited profit with limited risk. • High leverage than simply owning the stock. | Unlimited Profit and Limited Risk |