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Comparision (LONG PUT LADDER VS LONG CALL)

 

Compare Strategies

  LONG PUT LADDER LONG CALL
About Strategy

Long Put Ladder Option Strategy 

Long Put Ladder can be implemented when a trader is slightly bearish on the market and volatility. It involves buying of an ITM Put Option and sale of 1 ATM & 1 OTM Put Options. However, the risk associated with this strategy is unlimited and reward is limited.
Risk:<

Long Call Option Strategy

This is one of the basic strategies as it involves entering into one position i.e. buying the Call Option only. Any investor who buys the Call Option will be bullish in nature and would be expecting the market to give decent returns in the near future.

LONG PUT LADDER Vs LONG CALL - Details

LONG PUT LADDER LONG CALL
Market View Neutral Bullish
Type (CE/PE) PE (Put Option) CE (Call Option)
Number Of Positions 3 1
Strategy Level Advance Beginner Level
Reward Profile Limited Unlimited
Risk Profile Unlimited Limited
Breakeven Point Upper Breakeven Point = Strike Price of Long Put - Net Premium Paid, Lower Breakeven Point = Total Strike Prices of Short Puts - Strike Price of Long Put + Net Premium Paid Strike Price + Premium

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

LONG PUT LADDER LONG CALL
Market View Neutral Bullish (Any investor who buys the Call Option will be bullish in nature and would be expecting the market to give decent returns in the near future.)
When to use? This Strategy can be implemented when a trader is slightly bearish on the market and volatility. This strategy work when an investor expect the underlying instrument move in upward direction.
Action Buy 1 ITM Put, Sell 1 ATM Put, Sell 1 OTM Put Buying Call option
Breakeven Point Upper Breakeven Point = Strike Price of Long Put - Net Premium Paid, Lower Breakeven Point = Total Strike Prices of Short Puts - Strike Price of Long Put + Net Premium Paid Strike price + Premium

LONG PUT LADDER Vs LONG CALL - Risk & Reward

LONG PUT LADDER LONG CALL
Maximum Profit Scenario Strike Price of Long Put - Strike Price of Higher Strike Short Put - Net Premium Paid - Commissions Paid Underlying Asset close above from the strike price on expiry.
Maximum Loss Scenario When Price of Underlying < Total Strike Prices of Short Puts - Strike Price of Long Put + Net Premium Paid Premium Paid
Risk Unlimited Limited
Reward Limited Unlimited

LONG PUT LADDER Vs LONG CALL - Strategy Pros & Cons

LONG PUT LADDER LONG CALL
Similar Strategies Short Strangle (Sell Strangle), Short Straddle (Sell Straddle) Protective Put
Disadvantage • Unlimited risk. • Margin required. • In this strategy, there is not protection against the underlying stock falling in value. • 100% loss if the strike price, expiration dates or underlying stocks are badly chosen.
Advantages • Reduces capital outlay of bear put spread. • Wider maximum profit zone. • When there is decrease in implied volatility, this strategy can give profit. • Less investment, more profit. • Unlimited profit with limited risk. • High leverage than simply owning the stock.

LONG PUT LADDER

LONG CALL