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 Covered Put Vs Long Combo 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 Covered Put Vs Long Combo 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 Covered Put Vs Long Combo comparison:
| Comparison Aspect | Long Combo | Covered Put |
| View |  |  |
| Strategy Introduction | The long combo is used when the investor is bullish towards the market and is certain that the prices of the shares will go up...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 | The strategy expects low initial investment, however, the trader needs to pay the premium on the trades irrespective of the trade result. | 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 | Bullish | Neutral or Slightly Bearish |
| Strategy Level Suitable for | Intermediates | Experts |
| Options Traded | Put, Call | Put |
| Number of Positions | 2 | 2 |
| Action Needed | Sell One OTM Put, Buy One OTM Call | Short on Underlying and Short Put |
| Risk for You | Unlimited | Unlimited |
| Profit Potential | Unlimited | Limited |
| Break Even Point for Investor | Call Strike + Net Premium | Futures Price + Premium Received |
| Investor Intention | Low Upfront Investments, High ROI | Let Options Expire Worthlessly |
| Investor Expectation | Price of Stocks Go Up | Prices of Assets Go Down Slightly |
| Strategy Summary | Complex | Steady Profits with Caution |
| Advantages | Low Upfront Investment, Unlimited Profits | Income Generation, Reduced Losses |
| Disadvantages | Unlimited Loss, High Premium | Unlimited Risk in specific situations |
| Market Scenarios - Profit | 1 | 2 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | NA | Married Put |
| More Comparisons | Long Combo Vs Short Put | Covered Put Vs Short Put |
| Long Combo Vs Long Put | Covered Put Vs Long Combo | |
| Long Combo Vs Synthetic Call | Covered Put Vs Synthetic Call | |
| Long Combo Vs Short Call | Covered Put Vs Long Put | |
| Long Combo Vs Long Call | Covered Put Vs Long Call | |
| Long Combo Vs Covered Call | Covered Put Vs Covered Call | |
| Long Combo Vs Covered Put | Covered Put Vs Short Call | |
| Long Combo Vs Protective Call | Covered Put Vs Protective Call | |
| Long Combo Vs Short Box | Covered Put Vs Short Box | |
| Long Combo Vs Long Call Condor | Covered Put Vs Long Call Condor | |
| Long Combo Vs Short Call Condor | Covered Put Vs Short Call Condor | |
| Long Combo Vs Box Spread | Covered Put Vs Box Spread | |
| Long Combo Vs Short Strangle | Covered Put Vs Short Strangle | |
| Long Combo Vs Long Strangle | Covered Put Vs Long Strangle | |
| Long Combo Vs Collar Strategy | Covered Put Vs Collar Strategy | |
| Long Combo Vs Long Straddle | Covered Put Vs Long Straddle | |
| Long Combo Vs Short Straddle | Covered Put Vs Short Straddle | |
| Long Combo Vs Long Call Butterfly | Covered Put Vs Long Call Butterfly | |
| Long Combo Vs Short Call Butterfly | Covered Put Vs Short Call Butterfly | |
| Long Combo Vs Bear Call Spread | Covered Put Vs Bear Call Spread | |
| Long Combo Vs Bear Put Spread | Covered Put Vs Bear Put Spread | |
| Long Combo Vs Bull Call Spread | Covered Put Vs Bull Call Spread | |
| Long Combo Vs Bull Put Spread | Covered Put Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Covered Put Vs Long Combo option strategies.
If you are looking to put minimal initial investment and are open for unlimited profits as well as risks, then Long Combo options strategy can work wonders for you.
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.
In case you are looking to trade in options segment or share market in general, let us assist you in that. Just fill the form below and we will take you to the steps ahead.
