Compare Strategies
BULL CALENDER SPREAD | LONG COMBO | |
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About Strategy |
Bull Calendar Spread Option StrategyThis strategy is implemented when a trader is bullish on the underlying stock/index in the short term say 2 months or so. A trader will write one Near Month OTM Call Option and buy one next Month OTM Call Option, thereby reducing the cost of purchase, with the same strike price of the same underlying asset. This strategy is used when a trader wants to make prof |
Long Combo Option StrategyLong Combo Option Trading Strategy is implemented when a trader is bullish in nature and expects the stock price to rise in the near future. Here a trader will sell one ‘Out of the Money’ Put Option and buy one ‘Out of the Money’ Call Option. This trade will require less capital to implement since the amount required to buy the call will be covered by the amount received .. |
BULL CALENDER SPREAD Vs LONG COMBO - Details
BULL CALENDER SPREAD | LONG COMBO | |
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Market View | Bullish | Bullish |
Type (CE/PE) | CE (Call Option) + PE (Put Option) | CE (Call Option) + PE (Put Option) |
Number Of Positions | 2 | 2 |
Strategy Level | Beginners | Advance |
Reward Profile | Unlimited | Unlimited |
Risk Profile | Limited | Unlimited |
Breakeven Point | Stock Price when long call value is equal to net debit. | Call Strike + Net Premium |
BULL CALENDER SPREAD Vs LONG COMBO - When & How to use ?
BULL CALENDER SPREAD | LONG COMBO | |
---|---|---|
Market View | Bullish | Bullish |
When to use? | This strategy is used when a trader wants to make profit from a steady increase in the stock price over a short period of time. | This strategy is used when an investor Bullish on an underlying but don't have the required capital or the risk appetite to invest directly into it. |
Action | Sell 1 Near-Term OTM Call, Buy 1 Long-Term OTM Call | Sell OTM Put Option, Buy OTM Call Option |
Breakeven Point | Stock Price when long call value is equal to net debit. | Call Strike + Net Premium |
BULL CALENDER SPREAD Vs LONG COMBO - Risk & Reward
BULL CALENDER SPREAD | LONG COMBO | |
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Maximum Profit Scenario | You have unlimited profit potential to the upside. | Underlying asset goes up and Call option exercised |
Maximum Loss Scenario | Max Loss = Premium Paid + Commissions Paid | Underlying asset goes down and Put option exercised |
Risk | Limited | Unlimited |
Reward | Unlimited | Unlimited |
BULL CALENDER SPREAD Vs LONG COMBO - Strategy Pros & Cons
BULL CALENDER SPREAD | LONG COMBO | |
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Similar Strategies | The Collar, Bull Put Spread | - |
Disadvantage | • Limited profit even if underlying asset rallies. • If the short call options are assigned when the underlying asset rallies then losses can be sustained. | • Losses can keep on increasing as the price of stock goes down. • High risk strategy. |
Advantages | • Limited losses to the net debit. • Enable trader to book profit even if underlying asset stays stagnant. • If the market trends reverse, cashing in from stock price movement at limited risk. | • Capital investment is low and returns are high. • Unlimited reward, returns keep on increasing with the increase on stock price. • Leverage facility provided by this strategy is very beneficial. |