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Comparision (SHORT CALL LADDER VS LONG PUT)

 

Compare Strategies

  SHORT CALL LADDER LONG PUT
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.

Long Put Option Strategy

This strategy is implemented by buying 1 Put Option i.e. a single position, when the person is bearish on the market and expects the market to move downwards in the near future.
Risk: The maximum loss will be the premium amount paid.< ..

SHORT CALL LADDER Vs LONG PUT - Details

SHORT CALL LADDER LONG PUT
Market View Neutral Bearish
Type (CE/PE) CE (Call Option) PE (Put Option)
Number Of Positions 3 1
Strategy Level Advance Beginners
Reward Profile Unlimited Unlimited
Risk Profile Limited Limited
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 Long Put - Premium Paid

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

SHORT CALL LADDER LONG PUT
Market View Neutral Bearish
When to use? This strategy is implemented when a trader is moderately bullish on the market, and volatility A long put option strategy works well when you're expecting the underlying asset to sharply decline or be volatile in near future.
Action Sell 1 ITM Call, Buy 1 ATM Call, Buy 1 OTM Call Buy Put 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 Long Put - Premium Paid

SHORT CALL LADDER Vs LONG PUT - Risk & Reward

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

SHORT CALL LADDER Vs LONG PUT - Strategy Pros & Cons

SHORT CALL LADDER LONG PUT
Similar Strategies Short Put Ladder, Strip, Strap Protective Call, Short Put
Disadvantage • Unlimited risk. • Margin required. • 100% loss if strike price, expiration dates or underlying stocks are badly chosen. • Time decay.
Advantages • Higher probability of profit. • Unlimited upside profit. • Limited maximum loss. • Limited risk to the premium paid. • Less capital investment and more profit. • Unlimited profit potential with limited risk.

SHORT CALL LADDER

LONG PUT