Protective put is a strategy to use when you are bullish on a stock but want to protect your risk. For example, if you bought RIL futures at Rs.910, you can hedge your risk by buying 900 RIL Put at Rs.8. Your maximum loss on the strategy is Rs.18 (910-900+8). That means below Rs.892 even if RIL dips by Rs.100 your max loss will be capped at Rs.18 only. On the upside once you are profitable above Rs.918 (once your premium cost is covered). Beyond that your profits can be limitless.

In a covered call strategy, you sell higher call option to reduce your cost of holding a stock. Let us assume you purchased SBI at Rs.350 and the stock is now down to Rs.310. Your view is that the stock will not cross Rs.350 in the next 6 months. So, each month you can keep writing 350 call option on SBI and leave to expiry. If you earn Rs.5 each month on an average, your earning at the end of 6 months will be Rs.30. That effectively means your cost of SBI has come down from Rs.350 to Rs.320. If the price goes up, you hold the stock so you are covered.