SYNTHETIC LONG CALL	COVERED COMBINATION
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 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..

SYNTHETIC LONG CALL Vs COVERED COMBINATION - Details

	SYNTHETIC LONG CALL	COVERED COMBINATION
Market View	Bullish	Bullish
Type (CE/PE)	CE (Call Option)	CE (Call Option) + PE (Put 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 + Strike Price of Short Put - Net Premium Received) / 2

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

	SYNTHETIC LONG CALL	COVERED COMBINATION
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.	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.
Action	Buy 1 ATM Put or OTM Put	Sell 1 OTM Call, Sell 1 OTM Put
Breakeven Point	Underlying Price + Put Premium	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

SYNTHETIC LONG CALL Vs COVERED COMBINATION - Risk & Reward

	SYNTHETIC LONG CALL	COVERED COMBINATION
Maximum Profit Scenario	Current Price - Purchase Price - Premium Paid	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received - Commissions Paid
Maximum Loss Scenario	Premium Paid	Purchase Price of Underlying + Strike Price of Short Put - (2 x Price of Underlying) - Max Profit + Commissions Paid
Risk	Limited	Unlimited
Reward	Unlimited	Limited

SYNTHETIC LONG CALL Vs COVERED COMBINATION - Strategy Pros & Cons

	SYNTHETIC LONG CALL	COVERED COMBINATION
Similar Strategies	Protective Put, Long Call	Stock Repair Strategy
Disadvantage	•Chances of loss if the underlying goes down. •Incur losses if option is exercised.	Combinations can be profitable in sideways or rising markets. Greater combined net credit increases downside protection and potential return.
Advantages	•Limited risk, unlimited profit. •Protection to your long-term holdings. • Limited loss to the to the premium paid for Put option.	Limited Maximum Profit on the upside. Covered Combinations should only be traded on stocks that are bullish.