Compare Strategies
SHORT CALL LADDER | MARRIED PUT | |
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About Strategy |
Short Call Ladder Option StrategyThis 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. Risk:
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Married Put Option StrategyThis strategy is applied when trader goes long on the underlying asset i.e. he buys the stock in cash market. He has a bullish view and expects the market to rise in the near future, but simultaneously has the fear of downward movement of the markets. In order to cover his position from vulnerabilities he buys one ATM Put Option of the same underlying asset. Here, a trader wi .. |
SHORT CALL LADDER Vs MARRIED PUT - Details
SHORT CALL LADDER | MARRIED PUT | |
---|---|---|
Market View | Neutral | Bullish |
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 | Purchase Price of Underlying + Premium Paid |
SHORT CALL LADDER Vs MARRIED PUT - When & How to use ?
SHORT CALL LADDER | MARRIED PUT | |
---|---|---|
Market View | Neutral | Bullish |
When to use? | This strategy is implemented when a trader is moderately bullish on the market, and volatility | This Strategy work when the investor goes long in any stock. He expects the rise in market in future. |
Action | Sell 1 ITM Call, Buy 1 ATM Call, Buy 1 OTM Call | Buy 250 XYZ Shares, Buy 1 ATM 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 | Purchase Price of Underlying + Premium Paid |
SHORT CALL LADDER Vs MARRIED PUT - Risk & Reward
SHORT CALL LADDER | MARRIED PUT | |
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Maximum Profit Scenario | Profit Achieved When Price of Underlying > Total Strike Prices of Long Calls - Strike Price of Short Call + Net Premium Received | Profit = Price of Underlying - Purchase Price of Underlying - 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 MARRIED PUT - Strategy Pros & Cons
SHORT CALL LADDER | MARRIED PUT | |
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Similar Strategies | Short Put Ladder, Strip, Strap | Long Call |
Disadvantage | • Unlimited risk. • Margin required. | Cost of the put options eats into profit margin. |
Advantages | • Higher probability of profit. • Unlimited upside profit. • Limited maximum loss. | Unlimited Profit and Limited Risk |