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Comparision ( BULL CALENDER SPREAD VS SHORT CALL)

 

Compare Strategies

  BULL CALENDER SPREAD SHORT CALL
About Strategy

Bull Calendar Spread Option Strategy

This 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

Short Call Option Strategy

A trader shorts or writes a Call Option when he feels that underlying stock price is likely to go down. Selling Call Option is a strategy preferred for experienced traders.
However this strategy is very risky in nature. If the stock rallies on the upside, your risk becomes potentially unquantifiable and unlimited. If the strategy ..

BULL CALENDER SPREAD Vs SHORT CALL - Details

BULL CALENDER SPREAD SHORT CALL
Market View Bullish Bearish
Type (CE/PE) CE (Call Option) + PE (Put Option) CE (Call Option)
Number Of Positions 2 1
Strategy Level Beginners Advance
Reward Profile Unlimited Limited
Risk Profile Limited Unlimited
Breakeven Point Stock Price when long call value is equal to net debit. Strike Price of Short Call + Premium Received

BULL CALENDER SPREAD Vs SHORT CALL - When & How to use ?

BULL CALENDER SPREAD SHORT CALL
Market View Bullish Bearish
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. It is an aggressive strategy and involves huge risks. It should be used only in case where trader is certain about the bearish market view on the underlying.
Action Sell 1 Near-Term OTM Call, Buy 1 Long-Term OTM Call Sell or Write Call Option
Breakeven Point Stock Price when long call value is equal to net debit. Strike Price of Short Call + Premium Received

BULL CALENDER SPREAD Vs SHORT CALL - Risk & Reward

BULL CALENDER SPREAD SHORT CALL
Maximum Profit Scenario You have unlimited profit potential to the upside. Max Profit = Premium Received
Maximum Loss Scenario Max Loss = Premium Paid + Commissions Paid Loss Occurs When Price of Underlying > Strike Price of Short Call + Premium Received
Risk Limited Unlimited
Reward Unlimited Limited

BULL CALENDER SPREAD Vs SHORT CALL - Strategy Pros & Cons

BULL CALENDER SPREAD SHORT CALL
Similar Strategies The Collar, Bull Put Spread Covered Put, Covered Calls
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. • Unlimited risk to the upside underlying stocks. • Potential loss more than the premium collected.
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. • With the help of this strategy, traders can book profit from falling prices in the underlying asset. • Less investment, more profit. • Traders can book profit when underlying stock price fall, move sideways or rise by a small amount.

BULL CALENDER SPREAD

SHORT CALL