Compare Strategies
SHORT CALL LADDER | DIAGONAL BULL CALL SPREAD | |
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About Strategy |
Short Call Ladder Option StrategyThis strategy is implemented when a trader is moderately bullish on the market, and volatility. It involves sale of an ITM Call Option, buying of an ATM Call Option & OTM Call Option. The risk associated with the strategy is limited. Risk:
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Diagonal Bull Call Spread Option StrategyThis strategy is implemented by a trader when he is neutral – moderately bullish in the near-month contract and bullish in the mid-month contract. It involves sale of 1 Near-Month OTM Call Option and buying of 1 Mid Month ITM Call Option. Risk:
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SHORT CALL LADDER Vs DIAGONAL BULL CALL SPREAD - Details
SHORT CALL LADDER | DIAGONAL BULL CALL SPREAD | |
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Market View | Neutral | Bullish |
Type (CE/PE) | CE (Call Option) | CE (Call Option) |
Number Of Positions | 3 | 2 |
Strategy Level | Advance | Beginners |
Reward Profile | Unlimited | Limited |
Risk Profile | Limited | Limited |
Breakeven Point | Upper Breakeven Point = Total Strike Prices of Long Calls - Strike Price of Short Call + Net Premium Received Lower Breakeven Point = Strike Price of Short Call - Net Premium Received |
SHORT CALL LADDER Vs DIAGONAL BULL CALL SPREAD - When & How to use ?
SHORT CALL LADDER | DIAGONAL BULL CALL SPREAD | |
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Market View | Neutral | Bullish |
When to use? | This strategy is implemented when a trader is moderately bullish on the market, and volatility | |
Action | Sell 1 ITM Call, Buy 1 ATM Call, Buy 1 OTM Call | Buy 1 Long-Term ITM Call Sell 1 Near-Term OTM Call |
Breakeven Point | Upper Breakeven Point = Total Strike Prices of Long Calls - Strike Price of Short Call + Net Premium Received Lower Breakeven Point = Strike Price of Short Call - Net Premium Received |
SHORT CALL LADDER Vs DIAGONAL BULL CALL SPREAD - Risk & Reward
SHORT CALL LADDER | DIAGONAL BULL CALL SPREAD | |
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Maximum Profit Scenario | Profit Achieved When Price of Underlying > Total Strike Prices of Long Calls - Strike Price of Short Call + Net Premium Received | |
Maximum Loss Scenario | Strike Price of Lower Strike Long Call - Strike Price of Short Call - Net Premium Received + Commissions Paid | |
Risk | Limited | Limited |
Reward | Unlimited | Limited |
SHORT CALL LADDER Vs DIAGONAL BULL CALL SPREAD - Strategy Pros & Cons
SHORT CALL LADDER | DIAGONAL BULL CALL SPREAD | |
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Similar Strategies | Short Put Ladder, Strip, Strap | Bull Put Spread |
Disadvantage | • Unlimited risk. • Margin required. | |
Advantages | • Higher probability of profit. • Unlimited upside profit. • Limited maximum loss. |