Compare Strategies
REVERSE IRON CONDOR | SHORT CALL | |
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About Strategy |
Reverse Iron Condor Option StrategyReverse Iron Condor as the name suggests is the opposite of Iron Condors. In Reverse Iron Condor, a trader is bullish about volatility and expects the market to make a significant move in the near future in either direction. Here a trader will buy 1 OTM Call Option, sell 1 Deep OTM Call Option, buy 1 OTM Put Option, sell 1 Deep OTM Put Option. This strategy also |
Short Call Option StrategyA trader shorts or writes a Call Option when he feels that underlying stock price is likely to go down. Selling Call Option is a strategy preferred for experienced traders. However this strategy is very risky in nature. If the stock rallies on the upside, your risk becomes potentially unquantifiable and unlimited. If the strategy .. |
REVERSE IRON CONDOR Vs SHORT CALL - Details
REVERSE IRON CONDOR | SHORT CALL | |
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Market View | Neutral | Bearish |
Type (CE/PE) | CE (Call Option) + PE (Put Option) | CE (Call Option) |
Number Of Positions | 4 | 1 |
Strategy Level | Advance | Advance |
Reward Profile | Limited | Limited |
Risk Profile | Limited | Unlimited |
Breakeven Point | Upper Breakeven Point = Strike Price of Long Call + Net Premium Paid, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid | Strike Price of Short Call + Premium Received |
REVERSE IRON CONDOR Vs SHORT CALL - When & How to use ?
REVERSE IRON CONDOR | SHORT CALL | |
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Market View | Neutral | Bearish |
When to use? | In Reverse Iron Condor, a trader is bullish about volatility and expects the market to make a significant move in the near future in either direction | It is an aggressive strategy and involves huge risks. It should be used only in case where trader is certain about the bearish market view on the underlying. |
Action | Buy 1 OTM Put, Sell 1 OTM Put (Lower Strike), Buy 1 OTM Call, Sell 1 OTM Call (Higher Strike) | Sell or Write Call Option |
Breakeven Point | Upper Breakeven Point = Strike Price of Long Call + Net Premium Paid, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid | Strike Price of Short Call + Premium Received |
REVERSE IRON CONDOR Vs SHORT CALL - Risk & Reward
REVERSE IRON CONDOR | SHORT CALL | |
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Maximum Profit Scenario | Strike Price of Short Call (or Long Put) - Strike Price of Long Call (or Short Put) - Net Premium Paid - Commissions Paid | Max Profit = Premium Received |
Maximum Loss Scenario | Net Premium Paid + Commissions Paid | Loss Occurs When Price of Underlying > Strike Price of Short Call + Premium Received |
Risk | Limited | Unlimited |
Reward | Limited | Limited |
REVERSE IRON CONDOR Vs SHORT CALL - Strategy Pros & Cons
REVERSE IRON CONDOR | SHORT CALL | |
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Similar Strategies | Short Condor | Covered Put, Covered Calls |
Disadvantage | • Potential loss is higher than gain. • Limited profit. | • Unlimited risk to the upside underlying stocks. • Potential loss more than the premium collected. |
Advantages | • Able to profit whether stocks move in either direction up or down. • This strategy can be used by option traders who cannot use credit spreads. • Predictable maximum loss and profits. | • With the help of this strategy, traders can book profit from falling prices in the underlying asset. • Less investment, more profit. • Traders can book profit when underlying stock price fall, move sideways or rise by a small amount. |