Compare Strategies
| BULL CALENDER SPREAD | STOCK REPAIR | |
|---|---|---|
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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 |
Stock Repair Option StrategyStock Repair Strategy is used to cover up for losses made on long stock position. After the long position suffered losses on stock price fall, a trader will implement this strategy in order to bring down the breakeven price and capping his further losses thereby increasing his probability of loss recovery. Suppose Mr. X has .. |
BULL CALENDER SPREAD Vs STOCK REPAIR - Details
| BULL CALENDER SPREAD | STOCK REPAIR | |
|---|---|---|
| Market View | Bullish | Bullish |
| Type (CE/PE) | CE (Call Option) + PE (Put Option) | CE (Call Option) |
| Number Of Positions | 2 | 3 |
| 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. |
BULL CALENDER SPREAD Vs STOCK REPAIR - When & How to use ?
| BULL CALENDER SPREAD | STOCK REPAIR | |
|---|---|---|
| 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. | Stock Repair Strategy is used to cover up for losses made on long stock position. After the long position suffered losses on stock price fall, a trader will implement this strategy in order to bring down the breakeven price and capping his further losses thereby increasing his probability of loss recovery. |
| Action | Sell 1 Near-Term OTM Call, Buy 1 Long-Term OTM Call | Buy 1 ATM Call, Sell 2 OTM Calls |
| Breakeven Point | Stock Price when long call value is equal to net debit. |
BULL CALENDER SPREAD Vs STOCK REPAIR - Risk & Reward
| BULL CALENDER SPREAD | STOCK REPAIR | |
|---|---|---|
| Maximum Profit Scenario | You have unlimited profit potential to the upside. | |
| Maximum Loss Scenario | Max Loss = Premium Paid + Commissions Paid | |
| Risk | Limited | Limited |
| Reward | Unlimited | Unlimited |
BULL CALENDER SPREAD Vs STOCK REPAIR - Strategy Pros & Cons
| BULL CALENDER SPREAD | STOCK REPAIR | |
|---|---|---|
| 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. | • Management required with all the positions. • Additional loss due to continuous decline in shares as downside risk remains unchanged. |
| 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. | • This strategy creates an opportunity to recover losses by lowering our breakeven. • No margin required. • No additional downside risk and costs nothing to put on. |