Short Put Vs Long Combo Options Trading Platform Comparison

Compare Trading Platform Short Put and Long Combo. Find similarities and differences between Short Put and Long Combo Trading Softwares. Find the most powerful trading platform. Find which trading software is better among Short Put and Long Combo.

Short Put Vs Long Combo

	Short Put	Long Combo


About Strategy	A short put is another Bullish trading strategy wherein your view is that the price of an underlying will not move below a certain level. The strategy involves entering into a single position of selling a Put Option. It has low profit potential and is exposed to unlimited risk. A short put strategy involves selling a Put Option only. For example if you see that the shares of a Company A will not move below Rs 1000 then you sell the Put Option of that stock at Rs 1000 and receive the premium amount. The premium received will be the maximum profit you can earn from this trade. However, if the price of the underlying moves below 1000 then you will incur unlimited losses. Read More	A long Combo strategy is a Bullish Trading Strategy employed when a trader is expecting the price of a stock, he is holding to move up. It involves selling an OTM Put and buying an OTM Call. The strategy requires less capital as the cost of Call Option is covered by premium received from Put Option. Say SBI shares are currently trading at Rs 500. You are bullish on it but doesn't want to invest or have capital to do it. You can use Long Combo strategy here by selling a Put option of SBI at strike price of Rs 400 and buying a Call Option at a strike price of Rs 600. You will earn premium on sell Put Option and pay premium on buying Call Option. you are investing less but will benefit if SBI shares rises as per your expectations. Read More
Market View	Bullish	Bullish
Strategy Level	Beginners	Advance
Options Type	Put	Call + Put
Number of Positions	1	2
Risk Profile	Unlimited	Unlimited
Reward Profile	Limited	Unlimited
Breakeven Point	Strike Price - Premium	Call Strike + Net Premium

When and how to use Short Put and Long Combo?

	Short Put	Long Combo
When to use?	Short Put works well when you're Bullish that the price of the underlying will not fall beyond a certain level.	Long Combo strategy should be deployed when you're Bullish on an underlying but don't have the required capital or the risk appetite to invest directly into it.
Market View	Bullish When you are expecting the price or volatility of the underlying to increase marginally.	Bullish When you are expecting the price of the underlying to move up in near future.
Action	Sell Put Option A short put strategy involves selling a Put Option only. So if you see that the shares of a Company A will not move below a 1000 then you sell the Put Option of that stock at 1000 and receive the premium amount. The premium received will be the maximum profit you can earn from this deal. However, if the price of the underlying moves below 1000 than you will incur losses.	Sell OTM Put Option Buy OTM Call Option
Breakeven Point	Strike Price - Premium	Call Strike + Net Premium

Compare Risks and Rewards (Short Put Vs Long Combo)

	Short Put	Long Combo
Risks	Unlimited There is no limit to losses incurred in the trade. The risk is when the price of the underlying falls, and the Put is exercised. You are then obliged to buy the underlying at the strike price.	Unlimited Long Combo is a high risk strategy. You will start losing money when the price of the underlying moves below the lower strike price. Your losses can be unlimited depending on how low the price of underlying falls.
Rewards	Limited The profit is limited to premium received in your account when you sell the Put Option.	Unlimited Long Combo is a high return strategy. You will earn profits if the underlying moves above the higher price of the underlying. Your profit will depend on how high the price of the underlying moves.
Maximum Profit Scenario	Underlying doesn't go down and options remain exercised.	Underlying goes up and Call option exercised
Maximum Loss Scenario	Underlying goes down and options remain exercised.	Underlying goes down and Put option exercised

Pros & Cons or Short Put and Long Combo

	Short Put	Long Combo
Advantages	It allows you benefit from time decay. And earn income in a rising or range bound market scenario.	Brings down the cost of investing in a Bullish stocks. And delivers high returns if prices move up.
Disadvantage	It is a high risk strategy and may cause huge losses if the price of the underlying falls steeply.	Losses can be high if prices don't move as expected.
Simillar Strategies	Bull Put Spread, Covered Call, Short Straddle

Compare