STOCK BROKER REVIEW | INVESTING | UPCOMING IPO | ALGO TRADING | TECHNICAL ANALYSIS

Comparision (RATIO CALL WRITE VS REVERSE IRON CONDOR)

 

Compare Strategies

  RATIO CALL WRITE REVERSE IRON CONDOR
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.

Reverse Iron Condor Option Strategy

Reverse Iron Condor as the name suggests is the opposite of Iron Condors. In Reverse Iron Condor, a trader is bullish about volatility and expects the market to make a significant move in the near future in either direction. Here a trader will buy 1 OTM Call Option, sell 1 Deep OTM Call Option, buy 1 OTM Put Option, sell 1 Deep OTM Put Option. This strategy also ..

RATIO CALL WRITE Vs REVERSE IRON CONDOR - Details

RATIO CALL WRITE REVERSE IRON CONDOR
Market View Neutral Neutral
Type (CE/PE) CE (Call Option) CE (Call Option) + PE (Put 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 Upper Breakeven Point = Strike Price of Long Call + Net Premium Paid, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid

RATIO CALL WRITE Vs REVERSE IRON CONDOR - When & How to use ?

RATIO CALL WRITE REVERSE IRON CONDOR
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. In Reverse Iron Condor, a trader is bullish about volatility and expects the market to make a significant move in the near future in either direction
Action Sell 2 ATM Calls Buy 1 OTM Put, Sell 1 OTM Put (Lower Strike), Buy 1 OTM Call, Sell 1 OTM Call (Higher Strike)
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 Upper Breakeven Point = Strike Price of Long Call + Net Premium Paid, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid

RATIO CALL WRITE Vs REVERSE IRON CONDOR - Risk & Reward

RATIO CALL WRITE REVERSE IRON CONDOR
Maximum Profit Scenario Net Premium Received - Commissions Paid Strike Price of Short Call (or Long Put) - Strike Price of Long Call (or Short Put) - Net Premium Paid - Commissions 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 + Commissions Paid
Risk Unlimited Limited
Reward Limited Limited

RATIO CALL WRITE Vs REVERSE IRON CONDOR - Strategy Pros & Cons

RATIO CALL WRITE REVERSE IRON CONDOR
Similar Strategies Variable Ratio Write Short Condor
Disadvantage • Potential loss is higher than gain. • Limited profit. • Potential loss is higher than gain. • Limited profit.
Advantages • Able to profit whether stocks move in either direction up or down. • This strategy can be used by option traders who cannot use credit spreads. • Predictable maximum loss and profits.

RATIO CALL WRITE

REVERSE IRON CONDOR