STOCK BROKER REVIEW | INVESTING | UPCOMING IPO | ALGO TRADING | TECHNICAL ANALYSIS

Comparision ( BULL CALENDER SPREAD VS LONG PUT LADDER)

 

Compare Strategies

  BULL CALENDER SPREAD LONG PUT LADDER
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 Ladder Option Strategy 

Long 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
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
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
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
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.

BULL CALENDER SPREAD

LONG PUT LADDER