COVERED PUT	PROTECTIVE 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..	Protective Call Option Strategy This strategy is simply the reversal of the Synthetic Call Strategy. This strategy is implemented when a trader is bearish on the market and expects to go down. Trader will short underlying stock in the cash market and buy either an ATM Call Option or OTM Call Option. The Call Option is bought to protect / hedge the upside risk on the short position. The .. Read more..

COVERED PUT Vs PROTECTIVE CALL - Details

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

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

	COVERED PUT	PROTECTIVE CALL
Market View	Bearish	Bearish
When to use?	The Covered Put works well when the market is moderately Bearish.	This strategy is implemented when a trader is bearish on the market and expects to go down.
Action	Sell Underlying Sell OTM Put Option	Buy 1 ATM Call
Breakeven Point	Futures Price + Premium Received	Sale Price of Underlying + Premium Paid

COVERED PUT Vs PROTECTIVE CALL - Risk & Reward

	COVERED PUT	PROTECTIVE CALL
Maximum Profit Scenario	The profit happens when the price of the underlying moves above strike price of Short Put.	Sale Price of Underlying - Price of Underlying - Premium Paid
Maximum Loss Scenario	Price of Underlying - Sale Price of Underlying - Premium Received	Premium Paid + Call Strike Price - Sale Price of Underlying + Commissions Paid
Risk	Unlimited	Limited
Reward	Limited	Unlimited

COVERED PUT Vs PROTECTIVE CALL - Strategy Pros & Cons

	COVERED PUT	PROTECTIVE CALL
Similar Strategies	Bear Put Spread, Bear Call Spread	Put Backspread, Long Put
Disadvantage	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.	• Profitable when market moves as expected. • Not good for beginners.
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.	• Limited risk if the market moves in opposite direction as expected. • Allows you to keep open a profitable position to make further profits. • Unlimited profit potential.