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Comparision (SHORT CALL LADDER VS SHORT CALL)

 

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  SHORT CALL LADDER SHORT CALL
About Strategy

Short Call Ladder Option Strategy 

This strategy is implemented when a trader is moderately bullish on the market, and volatility. It involves sale of an ITM Call Option, buying of an ATM Call Option & OTM Call Option. The risk associated with the strategy is limited.

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 ..

SHORT CALL LADDER Vs SHORT CALL - Details

SHORT CALL LADDER SHORT CALL
Market View Neutral Bearish
Type (CE/PE) CE (Call Option) CE (Call Option)
Number Of Positions 3 1
Strategy Level Advance Advance
Reward Profile Unlimited Limited
Risk Profile Limited Unlimited
Breakeven Point Upper Breakeven Point = Total Strike Prices of Long Calls - Strike Price of Short Call + Net Premium Received Lower Breakeven Point = Strike Price of Short Call - Net Premium Received Strike Price of Short Call + Premium Received

SHORT CALL LADDER Vs SHORT CALL - When & How to use ?

SHORT CALL LADDER SHORT CALL
Market View Neutral Bearish
When to use? This strategy is implemented when a trader is moderately bullish on the market, and volatility 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 ITM Call, Buy 1 ATM Call, Buy 1 OTM Call Sell or Write Call Option
Breakeven Point Upper Breakeven Point = Total Strike Prices of Long Calls - Strike Price of Short Call + Net Premium Received Lower Breakeven Point = Strike Price of Short Call - Net Premium Received Strike Price of Short Call + Premium Received

SHORT CALL LADDER Vs SHORT CALL - Risk & Reward

SHORT CALL LADDER SHORT CALL
Maximum Profit Scenario Profit Achieved When Price of Underlying > Total Strike Prices of Long Calls - Strike Price of Short Call + Net Premium Received Max Profit = Premium Received
Maximum Loss Scenario Strike Price of Lower Strike Long Call - Strike Price of Short Call - Net Premium Received + Commissions Paid Loss Occurs When Price of Underlying > Strike Price of Short Call + Premium Received
Risk Limited Unlimited
Reward Unlimited Limited

SHORT CALL LADDER Vs SHORT CALL - Strategy Pros & Cons

SHORT CALL LADDER SHORT CALL
Similar Strategies Short Put Ladder, Strip, Strap Covered Put, Covered Calls
Disadvantage • Unlimited risk. • Margin required. • Unlimited risk to the upside underlying stocks. • Potential loss more than the premium collected.
Advantages • Higher probability of profit. • Unlimited upside profit. • Limited maximum loss. • 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.

SHORT CALL LADDER

SHORT CALL