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Comparision (SHORT CALL LADDER VS MARRIED PUT )

 

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  SHORT CALL LADDER MARRIED PUT
About Strategy

Short Call Ladder Option Strategy 

This 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.

Married Put Option Strategy

This 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
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
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

SHORT CALL LADDER

MARRIED PUT