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Comparision (SHORT CALL CONDOR SPREAD VS SHORT CALL)

 

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  SHORT CALL CONDOR SPREAD SHORT CALL
About Strategy

Short Call Condor Spread Option Strategy

Short Call Condor Spread is the opposite of Long Call Condor Spread i.e. sell 1 Deep ITM Call Option, buy 1 ITM Call Option, buy 1 OTM Call Option, sell 1 Deep OTM Call Option. Similar to Long Call Condor, the risk and rewards associated with this strategy are limited. Credit is received at the time of entering into this strategy.

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 CONDOR SPREAD Vs SHORT CALL - Details

SHORT CALL CONDOR SPREAD SHORT CALL
Market View Volatile Bearish
Type (CE/PE) CE (Call Option) CE (Call Option)
Number Of Positions 4 1
Strategy Level Advance Advance
Reward Profile Limited Limited
Risk Profile Limited Unlimited
Breakeven Point Lower Breakeven = Lower Strike Price + Net Premium, Upper breakeven = Higher Strike Price - Net Premium Strike Price of Short Call + Premium Received

SHORT CALL CONDOR SPREAD Vs SHORT CALL - When & How to use ?

SHORT CALL CONDOR SPREAD SHORT CALL
Market View Volatile Bearish
When to use? This strategy is used when an investor expect the price of the underlying stock to be very volatile. 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 Buy ITM Call Option + Buy OTM Call Option + Sell Deep OTM Call Option + Sell Deep ITM Call Option Sell or Write Call Option
Breakeven Point Lower Breakeven = Lower Strike Price + Net Premium, Upper breakeven = Higher Strike Price - Net Premium Strike Price of Short Call + Premium Received

SHORT CALL CONDOR SPREAD Vs SHORT CALL - Risk & Reward

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

SHORT CALL CONDOR SPREAD Vs SHORT CALL - Strategy Pros & Cons

SHORT CALL CONDOR SPREAD SHORT CALL
Similar Strategies Short Strangle Covered Put, Covered Calls
Disadvantage • Amount of profit is low in comparison with other strategies. • As this strategy has 4 legs so the brokerage cost is higher that will affect your profit. • Unlimited risk to the upside underlying stocks. • Potential loss more than the premium collected.
Advantages • This strategy allows you to profit from highly volatile underlying assets moving in any direction. • Earn profit with little or no investment. • Wider profit zone. • 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 CONDOR SPREAD

SHORT CALL