Compare Strategies
BEAR CALL SPREAD | IRON CONDORS | |
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About Strategy |
Bear Call Spread Option StrategyBear Call Spread option trading strategy is used by a trader who is bearish in nature and expects the underlying asset to dip in the near future. This strategy includes buying of an ‘Out of the Money’ Call Option and selling one ‘In the Money’ Call Option of the same underlying asset and the same expiration date. When you write a call, you receive premium thereby r |
Iron Condors Option StrategyIron Condor is a neutral trading strategy. A trader tries to make profit from low volatility in the price of the underlying asset. This strategy will be better understood if you recall ‘Bull Put Spread’ & ‘Bear Call Spread’. A trader will buy one Deep OTM Put Option and sell one OTM Put Option,. He will also sell one OTM Call Option and buy one Deep OTM Call Option. .. |
BEAR CALL SPREAD Vs IRON CONDORS - Details
BEAR CALL SPREAD | IRON CONDORS | |
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Market View | Bearish | 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 | Limited | Limited |
Breakeven Point | Strike Price of Short Call + Net Premium Received | Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received |
BEAR CALL SPREAD Vs IRON CONDORS - When & How to use ?
BEAR CALL SPREAD | IRON CONDORS | |
---|---|---|
Market View | Bearish | Neutral |
When to use? | This strategy is used when you are bearish in market view. The strategy minimizes your risk in the event of prime movements going against your expectations. | When a trader tries to make profit from low volatility in the price of the underlying asset. |
Action | Buy OTM Call Option, Sell ITM Call Option | Sell 1 OTM Put, Buy 1 OTM Put (Lower Strike), Sell 1 OTM Call, Buy 1 OTM Call (Higher Strike) |
Breakeven Point | Strike Price of Short Call + Net Premium Received | Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received |
BEAR CALL SPREAD Vs IRON CONDORS - Risk & Reward
BEAR CALL SPREAD | IRON CONDORS | |
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Maximum Profit Scenario | Max Profit = Net Premium Received - Commissions Paid | Net Premium Received - Commissions Paid |
Maximum Loss Scenario | Maximum Loss = Long Call Strike Price - Short Call Strike Price - Net Premium Received | Strike Price of Long Call - Strike Price of Short Call - Net Premium Received + Commissions Paid |
Risk | Limited | Limited |
Reward | Limited | Limited |
BEAR CALL SPREAD Vs IRON CONDORS - Strategy Pros & Cons
BEAR CALL SPREAD | IRON CONDORS | |
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Similar Strategies | Bear Put Spread, Bull Call Spread | Long Put Butterfly, Neutral Calendar Spread |
Disadvantage | • Limited amount of profit. • Margin requirement, more commission charges. | • Full of risk. • Unlimited maximum loss. |
Advantages | • This strategy takes advantage of time decay. • Investors can get profit in a flat market scenario. • Investors can earn options premium income with a lower degree of risk. | • Chance to gather double premium. • Sure, maximum gains on one-half the trade. • Flexible and double leverage at half price. |