SHORT CALL	PROTECTIVE PUT
About Strategy	Short Call Option Strategy A 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 Read more..	Protective Put Option Strategy Protective Put Strategy is a hedging strategy where trader guards himself from the downside risk. This strategy is adopted when a trader is long on the underlying asset but skeptical of the downside. He will buy one ATM Put Option to hedge his position. Now, if the underlying asset moves either up or down, the trader is in a safe position. Read more..

SHORT CALL Vs PROTECTIVE PUT - Details

	SHORT CALL	PROTECTIVE PUT
Market View	Bearish	Bullish
Type (CE/PE)	CE (Call Option)	PE (Put Option)
Number Of Positions	1	1
Strategy Level	Advance	Beginners
Reward Profile	Limited	Unlimited
Risk Profile	Unlimited	Limited
Breakeven Point	Strike Price of Short Call + Premium Received	Purchase Price of Underlying + Premium Paid

SHORT CALL Vs PROTECTIVE PUT - When & How to use ?

	SHORT CALL	PROTECTIVE PUT
Market View	Bearish	Bullish
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.	This strategy is adopted when a trader is long on the underlying asset but skeptical of the downside.
Action	Sell or Write Call Option	Buy 1 ATM Put
Breakeven Point	Strike Price of Short Call + Premium Received	Purchase Price of Underlying + Premium Paid

SHORT CALL Vs PROTECTIVE PUT - Risk & Reward

	SHORT CALL	PROTECTIVE PUT
Maximum Profit Scenario	Max Profit = Premium Received	Price of Underlying - Purchase Price of Underlying - Premium Paid
Maximum Loss Scenario	Loss Occurs When Price of Underlying > Strike Price of Short Call + Premium Received	Premium Paid + Purchase Price of Underlying - Put Strike + Commissions Paid
Risk	Unlimited	Limited
Reward	Limited	Unlimited

SHORT CALL Vs PROTECTIVE PUT - Strategy Pros & Cons

	SHORT CALL	PROTECTIVE PUT
Similar Strategies	Covered Put, Covered Calls	Long Call, Call Backspread
Disadvantage	• Unlimited risk to the upside underlying stocks. • Potential loss more than the premium collected.	• Value of protective put position decreases as time passes • Holding period of the protective put can be affected by the timing as a result tax rate on the profit or loss from the stock can be affected.
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.	• Unlimited potential profit due to indefinitely rise in the underlying stock price . • This strategy allows you to hold on to your stocks while insuring against losses. • Hedging strategy, trader can guard himself from the downside risk.