Long put

Option Strategy: Protective Call/Synthetic Long Put

If investors are of the view that market will go down or bearish but want to protect against an unexpected rise in the price of the stock. Suppose XYZ Ltd is trading at Rs 4457 in January. An investor Mr. A buys a Rs 4500 Call Option for Rs 100 while shorting the stock at Rs 4457. The Net credit of investor is Rs 4357 (Rs 4457- Rs 100). Strategy: Short Stock + Buy Call Option Risk is Limited  Maximum Risk(Rs 143) = Call strike Price (Rs 4500)- Stock Price (4457) +100. Rewards= Maximum is stock price-call Premium. Other Option Strategies Long Combo: Sell a Put, Buy a Call Covered C...
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Option Strategy: Long Put

Long Put strategy means to Buy Put option. Long Put is opposite of Buying Call. In Buy Call strategy, you are bullish about the stock/index. But when investors are bearish, they can buy a Put Option. The Put Option give a right to sell stocks at a specified price and thereby limit his risk. A long put is a bearish strategy to take advantage of a falling market. The risk is limited and rewards are unlimited. A bearish investor can profit from declining stock price by buying Puts. He limits his risk to the amount of premium paid, but his profit potential remains unlimited. This is one of the ...
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