Compare Strategies
RATIO CALL WRITE | SHORT CALL CONDOR SPREAD | |
---|---|---|
![]() |
![]() |
|
About Strategy |
Ratio Call Write Option StrategyThis strategy involves buying of an underlying asset in the cash/futures market and simultaneously selling ATM Calls double the number of long quantity. This strategy is used by a trader who is neutral on the market and bearish on the volatility in the near future. Here profits will be capped up to the premium amount and risk will be potentially unlimited. |
Short Call Condor Spread Option StrategyShort Call Condor Spread is the opposite of Long Call Condor Spread i.e. sell 1 Deep ITM Call Option, buy 1 ITM Call Option, buy 1 OTM Call Option, sell 1 Deep OTM Call Option. Similar to Long Call Condor, the risk and rewards associated with this strategy are limited. Credit is received at the time of entering into this strategy. |
RATIO CALL WRITE Vs SHORT CALL CONDOR SPREAD - Details
RATIO CALL WRITE | SHORT CALL CONDOR SPREAD | |
---|---|---|
Market View | Neutral | Volatile |
Type (CE/PE) | CE (Call Option) | CE (Call Option) |
Number Of Positions | 2 | 4 |
Strategy Level | Beginners | Advance |
Reward Profile | Limited | Limited |
Risk Profile | Unlimited | Limited |
Breakeven Point | Upper Breakeven Point = Strike Price of Short Calls + Points of Maximum Profit, Lower Breakeven Point = Strike Price of Short Calls - Points of Maximum Profit | Lower Breakeven = Lower Strike Price + Net Premium, Upper breakeven = Higher Strike Price - Net Premium |
RATIO CALL WRITE Vs SHORT CALL CONDOR SPREAD - When & How to use ?
RATIO CALL WRITE | SHORT CALL CONDOR SPREAD | |
---|---|---|
Market View | Neutral | Volatile |
When to use? | This strategy is used by a trader who is neutral on the market and bearish on the volatility in the near future. | This strategy is used when an investor expect the price of the underlying stock to be very volatile. |
Action | Sell 2 ATM Calls | Buy ITM Call Option + Buy OTM Call Option + Sell Deep OTM Call Option + Sell Deep ITM Call Option |
Breakeven Point | Upper Breakeven Point = Strike Price of Short Calls + Points of Maximum Profit, Lower Breakeven Point = Strike Price of Short Calls - Points of Maximum Profit | Lower Breakeven = Lower Strike Price + Net Premium, Upper breakeven = Higher Strike Price - Net Premium |
RATIO CALL WRITE Vs SHORT CALL CONDOR SPREAD - Risk & Reward
RATIO CALL WRITE | SHORT CALL CONDOR SPREAD | |
---|---|---|
Maximum Profit Scenario | Net Premium Received - Commissions Paid | Strike Price of Lower Strike Short Call - Strike Price of Lower Strike Long Call - Net Premium Paid |
Maximum Loss Scenario | Price of Underlying - Strike Price of Short Call - Net Premium Received OR Purchase Price of Underlying - Price of Underlying - Net Premium Received + Commissions Paid | Strike Price of Lower Strike Long Call - Strike Price of Lower Strike Short Call - Net Premium Received + Commissions Paid |
Risk | Unlimited | Limited |
Reward | Limited | Limited |
RATIO CALL WRITE Vs SHORT CALL CONDOR SPREAD - Strategy Pros & Cons
RATIO CALL WRITE | SHORT CALL CONDOR SPREAD | |
---|---|---|
Similar Strategies | Variable Ratio Write | Short Strangle |
Disadvantage | • Potential loss is higher than gain. • Limited profit. | • Amount of profit is low in comparison with other strategies. • As this strategy has 4 legs so the brokerage cost is higher that will affect your profit. |
Advantages | • This strategy allows you to profit from highly volatile underlying assets moving in any direction. • Earn profit with little or no investment. • Wider profit zone. |