There are two strategies that combine stock with option: covered call and protective put. Explain how these strategies work. Also discuss the risk and return characteristics of these two strategies. Provide examples for better clarity. Option contracts can be used to hedge and speculate on stock price. Speculating with option is riskier than speculating with stock. However, investors in option market use different combination strategies and spread strategy to modify the level of risk and return. In view of this, discuss about commonly used combination strategies and spread strategies; their suitability to the different types of investors; and risk and return characteristics involved in each of these strategies. Provide examples for better clarity