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Comparision ( BULL CALENDER SPREAD VS SHORT PUT)

 

Compare Strategies

  BULL CALENDER SPREAD SHORT PUT
About Strategy

Bull Calendar Spread Option Strategy

This strategy is implemented when a trader is bullish on the underlying stock/index in the short term say 2 months or so. A trader will write one Near Month OTM Call Option and buy one next Month OTM Call Option, thereby reducing the cost of purchase, with the same strike price of the same underlying asset. This strategy is used when a trader wants to make prof

Short Put Option Strategy

A trader will short put if he is bullish in nature and expects the underlying asset not to fall below a certain level.
Risk: Losses will be potentially unlimited if the stock skyrockets above the strike price of put.

BULL CALENDER SPREAD Vs SHORT PUT - Details

BULL CALENDER SPREAD SHORT PUT
Market View Bullish Bullish
Type (CE/PE) CE (Call Option) + PE (Put Option) PE (Put Option)
Number Of Positions 2 1
Strategy Level Beginners Beginners
Reward Profile Unlimited Limited
Risk Profile Limited Unlimited
Breakeven Point Stock Price when long call value is equal to net debit. Strike Price - Premium

BULL CALENDER SPREAD Vs SHORT PUT - When & How to use ?

BULL CALENDER SPREAD SHORT PUT
Market View Bullish Bullish
When to use? This strategy is used when a trader wants to make profit from a steady increase in the stock price over a short period of time. This strategy works well when you're Bullish that the price of the underlying will not fall beyond a certain level.
Action Sell 1 Near-Term OTM Call, Buy 1 Long-Term OTM Call Sell Put Option
Breakeven Point Stock Price when long call value is equal to net debit. Strike Price - Premium

BULL CALENDER SPREAD Vs SHORT PUT - Risk & Reward

BULL CALENDER SPREAD SHORT PUT
Maximum Profit Scenario You have unlimited profit potential to the upside. Premium received in your account when you sell the Put Option.
Maximum Loss Scenario Max Loss = Premium Paid + Commissions Paid Unlimited (When the price of the underlying falls.)
Risk Limited Unlimited
Reward Unlimited Limited

BULL CALENDER SPREAD Vs SHORT PUT - Strategy Pros & Cons

BULL CALENDER SPREAD SHORT PUT
Similar Strategies The Collar, Bull Put Spread Bull Put Spread, Short Starddle
Disadvantage • Limited profit even if underlying asset rallies. • If the short call options are assigned when the underlying asset rallies then losses can be sustained. • Unlimited risk. • Huge losses if the price of the underlying stock falls steeply.
Advantages • Limited losses to the net debit. • Enable trader to book profit even if underlying asset stays stagnant. • If the market trends reverse, cashing in from stock price movement at limited risk. • Benefit from time decay. • Less capital required than buying the stock outright. • Profit when underlying stock price rise, move sideways or drop by a relatively small account.

BULL CALENDER SPREAD

SHORT PUT