When it comes to Options Trading, there are different complexities involved in terms of choosing a specific strategy that works the best for you.
At the same time, each strategy has its own set of advantages as well as limitations, thus making the concept of options trading even more challenging. Thus, in case you are looking to fit a particular strategy in your option trades, just check few areas before you make a choice.
In this detailed comparison of Bull Call Spread Vs Covered Put options trading strategies, we will be looking at the below-mentioned aspects and more:
- Current Market Position
- Your Risk Appetite
- Your Trading Experience
- Profit Potential
- Intention and Expectation of a trader
- Break-even point of your trade
Apart from the Bull Call Spread Vs Covered Put strategies, there are more than 25 comparisons of each of these strategies with other option strategies. With all these comparisons, you should be able to filter the ones that work the best for you.
Here is the detailed Bull Call Spread Vs Covered Put comparison:
| Comparison Aspect | Bull Call Spread | Covered Put |
| View |  |  |
| Strategy Introduction | Bull Call Spread is a vertical options strategy that involves buying and selling two option contracts simultaneously, both with the same underlying security and expiry, but different strike prices...more | Covered Put is the options trading strategy which involves shorting the underlying asset, along with selling a put option on the same number of shares. By doing this, the trader is able to...more |
| Investor Obligation | It involves buying and selling two option contracts simultaneously, both with the same underlying security and expiry, but different strike prices. | If the price of the stock goes below the strike price of the put option, the put option will be expired and will have to be brought back. |
| Market Position | Moderately Bullish | Neutral or Slightly Bearish |
| Strategy Level Suitable for | Beginners | Experts |
| Options Traded | Call | Put |
| Number of Positions | 2 | 2 |
| Action Needed | 1 ATM Call, 1 OTM Call | Short on Underlying and Short Put |
| Risk for You | Limited | Unlimited |
| Profit Potential | Limited | Limited |
| Break Even Point for Investor | Strike price of Purchased Call + Net premium paid | Futures Price + Premium Received |
| Investor Intention | Let Options Expire Worthlessly | Let Options Expire Worthlessly |
| Investor Expectation | Prices of the securities to Go Up moderately | Prices of Assets Go Down Slightly |
| Strategy Summary | Safe Play | Steady Profits with Caution |
| Advantages | Limited Risk | Income Generation, Reduced Losses |
| Disadvantages | Capped Profit | Unlimited Risk in specific situations |
| Market Scenarios - Profit | 3 | 2 |
| Market Scenarios - Loss | 2 | 1 |
| Also called as | NA | Married Put |
| More Comparisons | Bull Call Spread Vs Short Put | Covered Put Vs Short Put |
| Bull Call Spread Vs Long Combo | Covered Put Vs Long Combo | |
| Bull Call Spread Vs Synthetic Call | Covered Put Vs Synthetic Call | |
| Bull Call Spread Vs Long Put | Covered Put Vs Long Put | |
| Bull Call Spread Vs Long Call | Covered Put Vs Long Call | |
| Bull Call Spread Vs Covered Call | Covered Put Vs Covered Call | |
| Bull Call Spread Vs Covered Put | Covered Put Vs Short Call | |
| Bull Call Spread Vs Protective Call | Covered Put Vs Protective Call | |
| Bull Call Spread Vs Short Box | Covered Put Vs Short Box | |
| Bull Call Spread Vs Long Call Condor | Covered Put Vs Long Call Condor | |
| Bull Call Spread Vs Short Call Condor | Covered Put Vs Short Call Condor | |
| Bull Call Spread Vs Box Spread | Covered Put Vs Box Spread | |
| Bull Call Spread Vs Short Strangle | Covered Put Vs Short Strangle | |
| Bull Call Spread Vs Long Strangle | Covered Put Vs Long Strangle | |
| Bull Call Spread Vs Collar Strategy | Covered Put Vs Collar Strategy | |
| Bull Call Spread Vs Long Straddle | Covered Put Vs Long Straddle | |
| Bull Call Spread Vs Short Straddle | Covered Put Vs Short Straddle | |
| Bull Call Spread Vs Long Call Butterfly | Covered Put Vs Long Call Butterfly | |
| Bull Call Spread Vs Short Call Butterfly | Covered Put Vs Short Call Butterfly | |
| Bull Call Spread Vs Bear Call Spread | Covered Put Vs Bear Call Spread | |
| Bull Call Spread Vs Bear Put Spread | Covered Put Vs Bear Put Spread | |
| Bull Call Spread Vs Short Call | Covered Put Vs Bull Call Spread | |
| Bull Call Spread Vs Bull Put Spread | Covered Put Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Bull Call Spread Vs Covered Put option strategies.
If you are in a moderately bullish market set-up and have a limited market risk appetite then you make consider using the Bull Call Spread strategy in your trades.
To add to that, the profit you get using this strategy is also limited in scope.
If you are looking at a bearish market momentum and are open towards high risk with consistent but limited profits, then Covered Put is suitable for your trading style.
Furthermore, as told above, it also depends on the market situation.
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