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Comparision ( BULL CALENDER SPREAD VS LONG PUT)

 

Compare Strategies

  BULL CALENDER SPREAD LONG 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

Long Put Option Strategy

This strategy is implemented by buying 1 Put Option i.e. a single position, when the person is bearish on the market and expects the market to move downwards in the near future.
Risk: The maximum loss will be the premium amount paid.< ..

BULL CALENDER SPREAD Vs LONG PUT - Details

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

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

BULL CALENDER SPREAD LONG PUT
Market View Bullish Bearish
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. A long put option strategy works well when you're expecting the underlying asset to sharply decline or be volatile in near future.
Action Sell 1 Near-Term OTM Call, Buy 1 Long-Term OTM Call Buy Put Option
Breakeven Point Stock Price when long call value is equal to net debit. Strike Price of Long Put - Premium Paid

BULL CALENDER SPREAD Vs LONG PUT - Risk & Reward

BULL CALENDER SPREAD LONG PUT
Maximum Profit Scenario You have unlimited profit potential to the upside. Profit = Strike Price of Long Put - Premium Paid
Maximum Loss Scenario Max Loss = Premium Paid + Commissions Paid Max Loss = Premium Paid + Commissions Paid
Risk Limited Limited
Reward Unlimited Unlimited

BULL CALENDER SPREAD Vs LONG PUT - Strategy Pros & Cons

BULL CALENDER SPREAD LONG PUT
Similar Strategies The Collar, Bull Put Spread Protective Call, Short Put
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. • 100% loss if strike price, expiration dates or underlying stocks are badly chosen. • Time decay.
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. • Limited risk to the premium paid. • Less capital investment and more profit. • Unlimited profit potential with limited risk.

BULL CALENDER SPREAD

LONG PUT