SYNTHETIC LONG CALL	COVERED CALL
About Strategy	Synthetic Long Call Option Strategy A trader is bullish in nature for short term, but also fearful about the downside risk associated with it. Here, a trader wants to hold an underlying asset either in physical form like in case of commodities or demat (electronic) form in case of stocks. But he is always exposed to downside risk and in order to mitigate his losses, Read more..	Covered Call Option Strategy Mr. X owns Reliance Shares and expects the price to rise in the near future. Mr. X is entitled to receive dividends for the shares he hold in cash market. Covered Call Strategy involves selling of OTM Call Option of the same underlying asset. The OTM Call Option Strike Price will generally be the price, where Mr. X will look to get out o .. Read more..

SYNTHETIC LONG CALL Vs COVERED CALL - Details

	SYNTHETIC LONG CALL	COVERED CALL
Market View	Bullish	Bullish
Type (CE/PE)	CE (Call Option)	CE (Call Option)
Number Of Positions	2	2
Strategy Level	Beginners	Advance
Reward Profile	When Price of Underlying > Purchase Price of Underlying + Premium Paid	Limited
Risk Profile	Limited (Maximum loss happens when the price of instrument move above from the strike price of put)	Unlimited
Breakeven Point	Underlying Price + Put Premium	Purchase Price of Underlying- Premium Received

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

	SYNTHETIC LONG CALL	COVERED CALL
Market View	Bullish	Bullish
When to use?	A trader is bullish in nature for short term, but also fearful about the downside risk associated with it.	An investor has a short term neutral view on the asset and for this reason holds the asset long and has a short position to generate income.
Action	Buy 1 ATM Put or OTM Put	(Buy Underlying) (Sell OTM Call Option)
Breakeven Point	Underlying Price + Put Premium	Purchase Price of Underlying- Premium Received

SYNTHETIC LONG CALL Vs COVERED CALL - Risk & Reward

	SYNTHETIC LONG CALL	COVERED CALL
Maximum Profit Scenario	Current Price - Purchase Price - Premium Paid	[Call Strike Price - Stock Price Paid] + Premium Received
Maximum Loss Scenario	Premium Paid	Purchase Price of Underlying - Price of Underlying) + Premium Received
Risk	Limited	Unlimited
Reward	Unlimited	Limited

SYNTHETIC LONG CALL Vs COVERED CALL - Strategy Pros & Cons

	SYNTHETIC LONG CALL	COVERED CALL
Similar Strategies	Protective Put, Long Call	Bull Call Spread
Disadvantage	•Chances of loss if the underlying goes down. •Incur losses if option is exercised.	• Unlimited risk, limited reward. • Inability to earn interest on the proceed used to buy the underlying stock.
Advantages	•Limited risk, unlimited profit. •Protection to your long-term holdings. • Limited loss to the to the premium paid for Put option.	• Profit from option premium, rise in the underlying stock and dividends on the stock. • Allows you to generate income from your holding. • Profit when underlying stock price rise, move sideways or marginal fall.