COVERED PUT	SHORT CALL
About Strategy	Covered Put Option Strategy  This strategy is exactly opposite to Covered Call Strategy. Here the investor is neutral or moderately bearish in nature and wants to take advantage of the price fall in the near future. The trader will short one lot of stock future. Now the trader will short ATM Put Option, the option strike price will be his exit price. If the prices rally above the strike price, the Read more..	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..

COVERED PUT Vs SHORT CALL - Details

	COVERED PUT	SHORT CALL
Market View	Bearish	Bearish
Type (CE/PE)	PE (Put Option) + Underlying	CE (Call Option)
Number Of Positions	2	1
Strategy Level	Advance	Advance
Reward Profile	Limited	Limited
Risk Profile	Unlimited	Unlimited
Breakeven Point	Futures Price + Premium Received	Strike Price of Short Call + Premium Received

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

	COVERED PUT	SHORT CALL
Market View	Bearish	Bearish
When to use?	The Covered Put works well when the market is moderately Bearish.	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 Underlying Sell OTM Put Option	Sell or Write Call Option
Breakeven Point	Futures Price + Premium Received	Strike Price of Short Call + Premium Received

COVERED PUT Vs SHORT CALL - Risk & Reward

	COVERED PUT	SHORT CALL
Maximum Profit Scenario	The profit happens when the price of the underlying moves above strike price of Short Put.	Max Profit = Premium Received
Maximum Loss Scenario	Price of Underlying - Sale Price of Underlying - Premium Received	Loss Occurs When Price of Underlying > Strike Price of Short Call + Premium Received
Risk	Unlimited	Unlimited
Reward	Limited	Limited

COVERED PUT Vs SHORT CALL - Strategy Pros & Cons

	COVERED PUT	SHORT CALL
Similar Strategies	Bear Put Spread, Bear Call Spread	Covered Put, Covered Calls
Disadvantage	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.	• Unlimited risk to the upside underlying stocks. • Potential loss more than the premium collected.
Advantages	• Investors can book profit when underlying stock price drop, move sideways or rises by a small amount. • Able to generate monthly income. • Able to generate profit from fall in prices or mild increase in the prices.	• 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.