Compare Strategies
BULL CALENDER SPREAD | LONG PUT LADDER | |
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About Strategy |
Bull Calendar Spread Option StrategyThis 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 Ladder Option StrategyLong Put Ladder can be implemented when a trader is slightly bearish on the market and volatility. It involves buying of an ITM Put Option and sale of 1 ATM & 1 OTM Put Options. However, the risk associated with this strategy is unlimited and reward is limited. Risk:< .. |
BULL CALENDER SPREAD Vs LONG PUT LADDER - Details
BULL CALENDER SPREAD | LONG PUT LADDER | |
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Market View | Bullish | Neutral |
Type (CE/PE) | CE (Call Option) + PE (Put Option) | PE (Put Option) |
Number Of Positions | 2 | 3 |
Strategy Level | Beginners | Advance |
Reward Profile | Unlimited | Limited |
Risk Profile | Limited | Unlimited |
Breakeven Point | Stock Price when long call value is equal to net debit. | Upper Breakeven Point = Strike Price of Long Put - Net Premium Paid, Lower Breakeven Point = Total Strike Prices of Short Puts - Strike Price of Long Put + Net Premium Paid |
BULL CALENDER SPREAD Vs LONG PUT LADDER - When & How to use ?
BULL CALENDER SPREAD | LONG PUT LADDER | |
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Market View | Bullish | Neutral |
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 can be implemented when a trader is slightly bearish on the market and volatility. |
Action | Sell 1 Near-Term OTM Call, Buy 1 Long-Term OTM Call | Buy 1 ITM Put, Sell 1 ATM Put, Sell 1 OTM Put |
Breakeven Point | Stock Price when long call value is equal to net debit. | Upper Breakeven Point = Strike Price of Long Put - Net Premium Paid, Lower Breakeven Point = Total Strike Prices of Short Puts - Strike Price of Long Put + Net Premium Paid |
BULL CALENDER SPREAD Vs LONG PUT LADDER - Risk & Reward
BULL CALENDER SPREAD | LONG PUT LADDER | |
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Maximum Profit Scenario | You have unlimited profit potential to the upside. | Strike Price of Long Put - Strike Price of Higher Strike Short Put - Net Premium Paid - Commissions Paid |
Maximum Loss Scenario | Max Loss = Premium Paid + Commissions Paid | When Price of Underlying < Total Strike Prices of Short Puts - Strike Price of Long Put + Net Premium Paid |
Risk | Limited | Unlimited |
Reward | Unlimited | Limited |
BULL CALENDER SPREAD Vs LONG PUT LADDER - Strategy Pros & Cons
BULL CALENDER SPREAD | LONG PUT LADDER | |
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Similar Strategies | The Collar, Bull Put Spread | Short Strangle (Sell Strangle), Short Straddle (Sell Straddle) |
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. • Margin required. |
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. | • Reduces capital outlay of bear put spread. • Wider maximum profit zone. • When there is decrease in implied volatility, this strategy can give profit. |