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Comparision (SHORT CALL LADDER VS DIAGONAL BULL CALL SPREAD)

 

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  SHORT CALL LADDER DIAGONAL BULL CALL SPREAD
About Strategy

Short Call Ladder Option Strategy 

This 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.

Diagonal Bull Call Spread Option Strategy

This 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.

SHORT CALL LADDER Vs DIAGONAL BULL CALL SPREAD - Details

SHORT CALL LADDER DIAGONAL BULL CALL SPREAD
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
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
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
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.

SHORT CALL LADDER

DIAGONAL BULL CALL SPREAD