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

Comparision (SHORT CALL CONDOR SPREAD VS LONG PUT LADDER)

 

Compare Strategies

  SHORT CALL CONDOR SPREAD LONG PUT LADDER
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.

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:< ..

SHORT CALL CONDOR SPREAD Vs LONG PUT LADDER - Details

SHORT CALL CONDOR SPREAD LONG PUT LADDER
Market View Volatile Neutral
Type (CE/PE) CE (Call Option) PE (Put Option)
Number Of Positions 4 3
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 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

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

SHORT CALL CONDOR SPREAD LONG PUT LADDER
Market View Volatile Neutral
When to use? This strategy is used when an investor expect the price of the underlying stock to be very volatile. This Strategy can be implemented when a trader is slightly bearish on the market and volatility.
Action Buy ITM Call Option + Buy OTM Call Option + Sell Deep OTM Call Option + Sell Deep ITM Call Option Buy 1 ITM Put, Sell 1 ATM Put, Sell 1 OTM Put
Breakeven Point Lower Breakeven = Lower Strike Price + Net Premium, Upper breakeven = Higher Strike Price - Net Premium 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

SHORT CALL CONDOR SPREAD Vs LONG PUT LADDER - Risk & Reward

SHORT CALL CONDOR SPREAD LONG PUT LADDER
Maximum Profit Scenario Strike Price of Lower Strike Short Call - Strike Price of Lower Strike Long Call - Net Premium Paid Strike Price of Long Put - Strike Price of Higher Strike Short Put - Net Premium Paid - Commissions Paid
Maximum Loss Scenario Strike Price of Lower Strike Long Call - Strike Price of Lower Strike Short Call - Net Premium Received + Commissions Paid When Price of Underlying < Total Strike Prices of Short Puts - Strike Price of Long Put + Net Premium Paid
Risk Limited Unlimited
Reward Limited Limited

SHORT CALL CONDOR SPREAD Vs LONG PUT LADDER - Strategy Pros & Cons

SHORT CALL CONDOR SPREAD LONG PUT LADDER
Similar Strategies Short Strangle Short Strangle (Sell Strangle), Short Straddle (Sell Straddle)
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. • Margin required.
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. • Reduces capital outlay of bear put spread. • Wider maximum profit zone. • When there is decrease in implied volatility, this strategy can give profit.

SHORT CALL CONDOR SPREAD

LONG PUT LADDER