Compare Strategies
BULL CALENDER SPREAD | LONG CALL | |
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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 Call Option StrategyThis 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. Risk:
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BULL CALENDER SPREAD Vs LONG CALL - Details
BULL CALENDER SPREAD | LONG CALL | |
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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 | |
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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 | |
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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 | |
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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. |