COVERED COMBINATION	LONG CALL
About Strategy	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 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 Vs LONG CALL - Details

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

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

	COVERED COMBINATION	LONG CALL
Market View	Bullish	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.)
When to use?	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.	This strategy work when an investor expect the underlying instrument move in upward direction.
Action	Sell 1 OTM Call, Sell 1 OTM Put	Buying Call option
Breakeven Point	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2	Strike price + Premium

COVERED COMBINATION Vs LONG CALL - Risk & Reward

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

COVERED COMBINATION Vs LONG CALL - Strategy Pros & Cons

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