Compare Strategies
| DIAGONAL BULL CALL SPREAD | CALL BACKSPREAD | |
|---|---|---|
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| About Strategy |
Diagonal Bull Call Spread Option StrategyThis 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. Risk:
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Call Backspread Option Trading This strategy is adopted by traders who are bullish in nature. He expects market and volatility to rise in the near future. A trader need not be direction specific here (i.e. an upward or downward trend, but a small bias towards an uptrend should always be present, as the gains will be much higher once the market moves up r .. |
DIAGONAL BULL CALL SPREAD Vs CALL BACKSPREAD - Details
| DIAGONAL BULL CALL SPREAD | CALL BACKSPREAD | |
|---|---|---|
| Market View | Bullish | Bullish |
| Type (CE/PE) | CE (Call Option) | CE (Call Option) |
| Number Of Positions | 2 | 3 |
| Strategy Level | Beginners | Advance |
| Reward Profile | Limited | Unlimited |
| Risk Profile | Limited | Limited |
| Breakeven Point | Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss |
DIAGONAL BULL CALL SPREAD Vs CALL BACKSPREAD - When & How to use ?
| DIAGONAL BULL CALL SPREAD | CALL BACKSPREAD | |
|---|---|---|
| Market View | Bullish | Bullish |
| When to use? | This strategy is used when the investor expects the price of the stock to rise in the future. | |
| Action | Buy 1 Long-Term ITM Call Sell 1 Near-Term OTM Call | Sell 1 ITM Call, BUY 2 OTM Call |
| Breakeven Point | Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss |
DIAGONAL BULL CALL SPREAD Vs CALL BACKSPREAD - Risk & Reward
| DIAGONAL BULL CALL SPREAD | CALL BACKSPREAD | |
|---|---|---|
| Maximum Profit Scenario | Unlimited profit potential if the stock goes in upward direction. | |
| Maximum Loss Scenario | Strike Price of long call - Strike Price of short call - Net premium received | |
| Risk | Limited | Limited |
| Reward | Limited | Unlimited |
DIAGONAL BULL CALL SPREAD Vs CALL BACKSPREAD - Strategy Pros & Cons
| DIAGONAL BULL CALL SPREAD | CALL BACKSPREAD | |
|---|---|---|
| Similar Strategies | Bull Put Spread | - |
| Disadvantage | ||
| Advantages | • Unlimited profit potential. |