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Comparision ( BULL CALENDER SPREAD VS MARRIED PUT )

 

Compare Strategies

  BULL CALENDER SPREAD MARRIED PUT
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

Married Put Option Strategy

This strategy is applied when trader goes long on the underlying asset i.e. he buys the stock in cash market. He has a bullish view and expects the market to rise in the near future, but simultaneously has the fear of downward movement of the markets. In order to cover his position from vulnerabilities he buys one ATM Put Option of the same underlying asset. Here, a trader wi ..

BULL CALENDER SPREAD Vs MARRIED PUT - Details

BULL CALENDER SPREAD MARRIED PUT
Market View Bullish Bullish
Type (CE/PE) CE (Call Option) + PE (Put Option) PE (Put Option)
Number Of Positions 2 1
Strategy Level Beginners Beginners
Reward Profile Unlimited Unlimited
Risk Profile Limited Limited
Breakeven Point Stock Price when long call value is equal to net debit. Purchase Price of Underlying + Premium Paid

BULL CALENDER SPREAD Vs MARRIED PUT - When & How to use ?

BULL CALENDER SPREAD MARRIED PUT
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 work when the investor goes long in any stock. He expects the rise in market in future.
Action Sell 1 Near-Term OTM Call, Buy 1 Long-Term OTM Call Buy 250 XYZ Shares, Buy 1 ATM Put Option
Breakeven Point Stock Price when long call value is equal to net debit. Purchase Price of Underlying + Premium Paid

BULL CALENDER SPREAD Vs MARRIED PUT - Risk & Reward

BULL CALENDER SPREAD MARRIED PUT
Maximum Profit Scenario You have unlimited profit potential to the upside. Profit = Price of Underlying - Purchase Price of Underlying - Premium Paid
Maximum Loss Scenario Max Loss = Premium Paid + Commissions Paid Max Loss = Premium Paid + Commissions Paid
Risk Limited Limited
Reward Unlimited Unlimited

BULL CALENDER SPREAD Vs MARRIED PUT - Strategy Pros & Cons

BULL CALENDER SPREAD MARRIED PUT
Similar Strategies The Collar, Bull Put Spread Long Call
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. Cost of the put options eats into profit margin.
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. Unlimited Profit and Limited Risk

BULL CALENDER SPREAD

MARRIED PUT