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Comparision ( BULL CALENDER SPREAD VS LONG CALL)

 

Compare Strategies

  BULL CALENDER SPREAD LONG CALL
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 Call Option Strategy

This is one of the basic strategies as it involves entering into one position i.e. buying the Call Option only. Any investor who buys the Call Option will be bullish in nature and would be expecting the market to give decent returns in the near future.

BULL CALENDER SPREAD Vs LONG CALL - Details

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

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

BULL CALENDER SPREAD LONG CALL
Market View Bullish Bullish (Any investor who buys the Call Option will be bullish in nature and would be expecting the market to give decent returns in the near future.)
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 work when an investor expect the underlying instrument move in upward direction.
Action Sell 1 Near-Term OTM Call, Buy 1 Long-Term OTM Call Buying Call option
Breakeven Point Stock Price when long call value is equal to net debit. Strike price + Premium

BULL CALENDER SPREAD Vs LONG CALL - Risk & Reward

BULL CALENDER SPREAD LONG CALL
Maximum Profit Scenario You have unlimited profit potential to the upside. Underlying Asset close above from the strike price on expiry.
Maximum Loss Scenario Max Loss = Premium Paid + Commissions Paid Premium Paid
Risk Limited Limited
Reward Unlimited Unlimited

BULL CALENDER SPREAD Vs LONG CALL - Strategy Pros & Cons

BULL CALENDER SPREAD LONG CALL
Similar Strategies The Collar, Bull Put Spread Protective 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. • In this strategy, there is not protection against the underlying stock falling in value. • 100% loss if the strike price, expiration dates or underlying stocks are badly chosen.
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. • Less investment, more profit. • Unlimited profit with limited risk. • High leverage than simply owning the stock.

BULL CALENDER SPREAD

LONG CALL