LONG CALL	COVERED COMBINATION
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. Risk: Read more..	Covered Combination Option Strategy This strategy involves selling OTM Call & Put Options and buying the underlying asset in either cash or futures market. It is also known as Covered Strangle as the profits are capped and risk is potentially unlimited. Risk: Un .. Read more..

LONG CALL Vs COVERED COMBINATION - Details

	LONG CALL	COVERED COMBINATION
Market View	Bullish	Bullish
Type (CE/PE)	CE (Call Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	1	2
Strategy Level	Beginner Level	Advance
Reward Profile	Unlimited	Limited
Risk Profile	Limited	Unlimited
Breakeven Point	Strike Price + Premium	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

LONG CALL Vs COVERED COMBINATION - When & How to use ?

	LONG CALL	COVERED COMBINATION
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 is mainly suited for investors who are moderately bullish on a stock and are comfortable with increasing their position in the event of a price decline.
Action	Buying Call option	Sell 1 OTM Call, Sell 1 OTM Put
Breakeven Point	Strike price + Premium	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

LONG CALL Vs COVERED COMBINATION - Risk & Reward

	LONG CALL	COVERED COMBINATION
Maximum Profit Scenario	Underlying Asset close above from the strike price on expiry.	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received - Commissions Paid
Maximum Loss Scenario	Premium Paid	Purchase Price of Underlying + Strike Price of Short Put - (2 x Price of Underlying) - Max Profit + Commissions Paid
Risk	Limited	Unlimited
Reward	Unlimited	Limited

LONG CALL Vs COVERED COMBINATION - Strategy Pros & Cons

	LONG CALL	COVERED COMBINATION
Similar Strategies	Protective Put	Stock Repair Strategy
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.	Combinations can be profitable in sideways or rising markets. Greater combined net credit increases downside protection and potential return.
Advantages	• Less investment, more profit. • Unlimited profit with limited risk. • High leverage than simply owning the stock.	Limited Maximum Profit on the upside. Covered Combinations should only be traded on stocks that are bullish.