Covered Call Vs Short Condor (Short Call Condor) Options Trading Platform Comparison

Compare Trading Platform Covered Call and Short Condor (Short Call Condor). Find similarities and differences between Covered Call and Short Condor (Short Call Condor) Trading Softwares. Find the most powerful trading platform. Find which trading software is better among Covered Call and Short Condor (Short Call Condor).

Covered Call Vs Short Condor (Short Call Condor)

	Covered Call	Short Condor (Short Call Condor)


About Strategy	A Covered Call is a basic option trading strategy frequently used by traders to protect their huge share holdings. It is a strategy in which you own shares of a company and Sell OTM Call Option of the company in similar proportion. The Call Option would not get exercised unless the stock price increases. Till then you will earn the Premium. This a unlimited risk and limited reward strategy. Let's assume you own TCS Shares and your view is that its price will rise in the near future. You will Sell OTM Call Option of TCS at a price, where you target to sell your shares. You will receive premium amount for selling the Call option and the premium is your income. Read More	A Short Call Condor (or Short Condor) is a neutral strategy with a limited risk and a limited profit. The short condor strategy is suitable for a high volatile underlying. The goal of this strategy is to profit from a stock price moving up or down beyond the highest or lowest strike prices of the position. The strategy is similar to Short Call Butterfly strategy with the difference being in the strike prices selected. Suppose Nifty is currently trading at 10,400. If the trader is expecting high volatility in the index due to specific events i.e. budget, results, and elections, he could choose the Short Condor strategy to profit in such a market scenario. The strategy could be constructed as below: Short Condor Options Strategy Read More
Market View	Bullish	Volatile
Strategy Level	Advance	Advance
Options Type	Call + Underlying	Call
Number of Positions	2	4
Risk Profile	Unlimited	Limited
Reward Profile	Limited	Limited
Breakeven Point	Purchase Price of Underlying- Premium Recieved

When and how to use Covered Call and Short Condor (Short Call Condor)?

	Covered Call	Short Condor (Short Call Condor)
When to use?	The covered call option strategy works well when you have a mildly Bullish market view and you expect the price of your holdings to moderately rise in future.	The Short Call Condor works well when you expect the price of the underlying to be very volatile. In other words, when the trader is anticipating massive price movements (in any direction) in the underlying during the lifetime of the options.
Market View	Bullish When you are expecting a moderate rise in the price of the underlying or less volatility.	Volatile When you are unsure about the direction in the movement in the price of the underlying but are expecting high volatility in it in the near future.
Action	Buy Underlying Sell OTM Call Option Let's assume you own TCS Shares and your view is that its price will rise in the near future. You will Sell OTM Call Option of TCS at a price, where you target to sell your shares. You will receive premium amount for selling the Call option and the premium is your income.	Buy ITM Call Option + Buy OTM Call Option + Sell Deep OTM Call Option + Sell Deep ITM Call Option Suppose Nifty is trading at 10,400. If you expect high volatility in the Nifty in the coming days then you can execute Short Call Condor by selling 1 ITM Nifty Call at 10,200, buying 1 ITM Call at 10,300, buying 1 OTM Call Option at 10, 500 and selling 1 OTM Nifty Call at 10, 600. Your maximum loss will be if Nifty closes in the range of 10,300 to 10,500 on expiry while maximum profit will be on either side of upper or lower strikes.
Breakeven Point	Purchase Price of Underlying- Premium Recieved	There are 2 break even points in this strategy. The upper break even is hit when the underlying price is equal to the difference between strike price of highest strike shot call and net premium paid. The lower break even is hit when the underlying price is equal to the strike price of lowest strike short call and net premium paid. Lower Breakeven = Lower Strike Price + Net Premium Upper breakeven = Higher Strike Price - Net Premium

Compare Risks and Rewards (Covered Call Vs Short Condor (Short Call Condor))

	Covered Call	Short Condor (Short Call Condor)
Risks	Unlimited Maximum loss is unlimited and depends on by how much the price of the underlying falls. Loss happens when price of underlying goes below the purchase price of underlying. Loss = (Purchase Price of Underlying - Price of Underlying) + Premium Received	Limited This is a limited risk strategy. The maximum risk in a short call condor strategy is calculated as below: Max Loss = Strike Price of Lower Strike Long Call - Strike Price of Lower Strike Short Call - Net Premium Received + Commissions Paid The max risk is when the price of the underlying remains in between strike price of 2 long calls.
Rewards	Limited You earn premium for selling a call. Maximum profit happens when purchase price of underlying moves above the strike price of Call Option. Max Profit= [Call Strike Price - Stock Price Paid] + Premium Received	Limited The maximum profit in a short call condor strategy is realized when the price of the underlying is trading outside the range at time of expiration.<.p> Max Profit = Strike Price of Lower Strike Short Call - Strike Price of Lower Strike Long Call - Net Premium Paid
Maximum Profit Scenario	Underlying rises to the level of the higher strike or above.	All options exercised or not exercised
Maximum Loss Scenario	Underlying below the premium received	Both ITM Calls exercised

Pros & Cons or Covered Call and Short Condor (Short Call Condor)

	Covered Call	Short Condor (Short Call Condor)
Advantages	It helps you generate income from your holdings. Also allows you to benefit from 3 movements of your stocks: rise, sidewise and marginal fall.	It allows you to profit from highly volatile underlying assets moving in any direction. The maximum profit for the condor trade may be low in relation to other trading strategies but it has a comparatively wider profit zone. Earn profit with little or no investment as you will have a credit of net premiums.
Disadvantage	Unlimited risk for limited reward.	Strike prices selected may have an impact on the potential of profit. Brokerage and taxes make a significant impact on the profits from this strategy. The cost of trading increases with the number of legs. This strategy has 4 legs and thus the brokerage cost is higher.
Simillar Strategies	Bull Call Spread	Long Put Butterfly, Short Call Condor, Short Strangle

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