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Comparision (RATIO CALL WRITE VS LONG CALL CONDOR SPREAD)

 

Compare Strategies

  RATIO CALL WRITE LONG CALL CONDOR SPREAD
About Strategy

Ratio Call Write Option Strategy 

This strategy involves buying of an underlying asset in the cash/futures market and simultaneously selling ATM Calls double the number of long quantity. This strategy is used by a trader who is neutral on the market and bearish on the volatility in the near future. Here profits will be capped up to the premium amount and risk will be potentially unlimited.

Long Call Condor Spread Option Strategy 

This strategy is implemented when a trader is bearish on the volatility and expects the market to move sideways. Using Call Options of the same expiry date, he will buy one Deep ITM Call Option, sell 1 ITM Call Option, sell 1 OTM Call Option, buy 1 Deep OTM Call Option. The risk and reward both are limited due to offsetting of long and short positions. For t ..

RATIO CALL WRITE Vs LONG CALL CONDOR SPREAD - Details

RATIO CALL WRITE LONG CALL CONDOR SPREAD
Market View Neutral Neutral
Type (CE/PE) CE (Call Option) CE (Call Option)
Number Of Positions 2 4
Strategy Level Beginners Advance
Reward Profile Limited Limited
Risk Profile Unlimited Limited
Breakeven Point Upper Breakeven Point = Strike Price of Short Calls + Points of Maximum Profit, Lower Breakeven Point = Strike Price of Short Calls - Points of Maximum Profit Lower Breakeven = Lower Strike Price + Net Premium Upper breakeven = Higher Strike Price - Net Premium

RATIO CALL WRITE Vs LONG CALL CONDOR SPREAD - When & How to use ?

RATIO CALL WRITE LONG CALL CONDOR SPREAD
Market View Neutral Neutral
When to use? This strategy is used by a trader who is neutral on the market and bearish on the volatility in the near future. This strategy works well when you expect the price of the underlying asset to be range bound in the coming days.
Action Sell 2 ATM Calls Buy Deep ITM Call Option, Buy Deep OTM Call Option, Sell ITM Call Option, Sell OTM Call Option
Breakeven Point Upper Breakeven Point = Strike Price of Short Calls + Points of Maximum Profit, Lower Breakeven Point = Strike Price of Short Calls - Points of Maximum Profit Lower Breakeven = Lower Strike Price + Net Premium Upper breakeven = Higher Strike Price - Net Premium

RATIO CALL WRITE Vs LONG CALL CONDOR SPREAD - Risk & Reward

RATIO CALL WRITE LONG CALL CONDOR SPREAD
Maximum Profit Scenario Net Premium Received - Commissions Paid Strike Price of Lower Strike Short Call - Strike Price of Lower Strike Long Call - Net Premium Paid
Maximum Loss Scenario Price of Underlying - Strike Price of Short Call - Net Premium Received OR Purchase Price of Underlying - Price of Underlying - Net Premium Received + Commissions Paid Net Premium Paid
Risk Unlimited Limited
Reward Limited Limited

RATIO CALL WRITE Vs LONG CALL CONDOR SPREAD - Strategy Pros & Cons

RATIO CALL WRITE LONG CALL CONDOR SPREAD
Similar Strategies Variable Ratio Write Long Put Butterfly, Short Call Condor, Short Strangle
Disadvantage • Potential loss is higher than gain. • Limited profit. • Amount of profit is comparatively low. • As this strategy has 4 legs so the brokerage cost is higher that will affect your profit.
Advantages • Capable to generate profit even if there is low volatility in the market. • This strategy is associated with limited risk and limited profit. • Wider profit zone.

RATIO CALL WRITE

LONG CALL CONDOR SPREAD