Compare Strategies
| BULL CALL SPREAD | STOCK REPAIR | |
|---|---|---|
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| About Strategy |
Bull Call Spread Option StrategyBull Call Spread option trading strategy is used by a trader who is bullish in nature and expects the underlying asset to give decent returns in the near future. This strategy includes buying of an ‘In The Money’ Call Option and selling of ‘Deep Out Of the Money’ Call Option of the same underlying asset and the same expiration date. |
Stock Repair Option StrategyStock Repair Strategy is used to cover up for losses made on long stock position. After the long position suffered losses on stock price fall, a trader will implement this strategy in order to bring down the breakeven price and capping his further losses thereby increasing his probability of loss recovery. Suppose Mr. X has .. |
BULL CALL SPREAD Vs STOCK REPAIR - Details
| BULL CALL SPREAD | STOCK REPAIR | |
|---|---|---|
| Market View | Bullish | Bullish |
| Type (CE/PE) | CE (Call Option) | CE (Call Option) |
| Number Of Positions | 2 | 3 |
| Strategy Level | Beginners | Beginners |
| Reward Profile | Limited | Unlimited |
| Risk Profile | Limited | Limited |
| Breakeven Point | Strike price of purchased call + net premium paid |
BULL CALL SPREAD Vs STOCK REPAIR - When & How to use ?
| BULL CALL SPREAD | STOCK REPAIR | |
|---|---|---|
| Market View | Bullish | Bullish |
| When to use? | This strategy is used when an investor is Bullish in the market but expect the underlying to gain mildly in near future. | Stock Repair Strategy is used to cover up for losses made on long stock position. After the long position suffered losses on stock price fall, a trader will implement this strategy in order to bring down the breakeven price and capping his further losses thereby increasing his probability of loss recovery. |
| Action | Buy ITM Call Option, Sell OTM Call Option | Buy 1 ATM Call, Sell 2 OTM Calls |
| Breakeven Point | Strike price of purchased call + net premium paid |
BULL CALL SPREAD Vs STOCK REPAIR - Risk & Reward
| BULL CALL SPREAD | STOCK REPAIR | |
|---|---|---|
| Maximum Profit Scenario | (Strike Price of Call 1 - Strike Price of Call 2) - Net Premium Paid | |
| Maximum Loss Scenario | Net Premium Paid | |
| Risk | Limited | Limited |
| Reward | Limited | Unlimited |
BULL CALL SPREAD Vs STOCK REPAIR - Strategy Pros & Cons
| BULL CALL SPREAD | STOCK REPAIR | |
|---|---|---|
| Similar Strategies | Collar | |
| Disadvantage | • Limited profit potential to the higher strike call sold if the underlying stock price rises. • Maximum profit only if stock rises to the higher of 2 strike prices selected. | • Management required with all the positions. • Additional loss due to continuous decline in shares as downside risk remains unchanged. |
| Advantages | • Allows you to reduce risk and cost of your investment. • When placing the spread, exit strategy is pre-determined in advance. • Risk is limited to the net premium paid. | • This strategy creates an opportunity to recover losses by lowering our breakeven. • No margin required. • No additional downside risk and costs nothing to put on. |