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Comparision (SHORT CALL CONDOR SPREAD VS LONG CALL BUTTERFLY)

 

Compare Strategies

  SHORT CALL CONDOR SPREAD LONG CALL BUTTERFLY
About Strategy

Short Call Condor Spread Option Strategy

Short Call Condor Spread is the opposite of Long Call Condor Spread i.e. sell 1 Deep ITM Call Option, buy 1 ITM Call Option, buy 1 OTM Call Option, sell 1 Deep OTM Call Option. Similar to Long Call Condor, the risk and rewards associated with this strategy are limited. Credit is received at the time of entering into this strategy.

Long Call Butterfly Option Strategy

A trader, who is neutral in nature and believes that there will be very low volatility i.e. expects the market to remain range bound, will implement this strategy. This strategy involves selling of 2 ATM Call Options, buying 1 ITM Call Option & buying 1 OTM Call Option of the same expiry date & same underlying asset. The difference between the strikes sho ..

SHORT CALL CONDOR SPREAD Vs LONG CALL BUTTERFLY - Details

SHORT CALL CONDOR SPREAD LONG CALL BUTTERFLY
Market View Volatile Neutral
Type (CE/PE) CE (Call Option) CE (Call Option)
Number Of Positions 4 4
Strategy Level Advance Advance
Reward Profile Limited Limited
Risk Profile Limited Limited
Breakeven Point Lower Breakeven = Lower Strike Price + Net Premium, Upper breakeven = Higher Strike Price - Net Premium Upper Breakeven = Higher Strike Price - Net Premium, Lower Breakeven = Lower Strike Price + Net Premium

SHORT CALL CONDOR SPREAD Vs LONG CALL BUTTERFLY - When & How to use ?

SHORT CALL CONDOR SPREAD LONG CALL BUTTERFLY
Market View Volatile Neutral
When to use? This strategy is used when an investor expect the price of the underlying stock to be very volatile. This strategy should be used when you're expecting no volatility in the price of the underlying.
Action Buy ITM Call Option + Buy OTM Call Option + Sell Deep OTM Call Option + Sell Deep ITM Call Option Sell 2 ATM Call, Buy 1 ITM Call, Buy 1 OTM Call
Breakeven Point Lower Breakeven = Lower Strike Price + Net Premium, Upper breakeven = Higher Strike Price - Net Premium Upper Breakeven = Higher Strike Price - Net Premium, Lower Breakeven = Lower Strike Price + Net Premium

SHORT CALL CONDOR SPREAD Vs LONG CALL BUTTERFLY - Risk & Reward

SHORT CALL CONDOR SPREAD LONG CALL BUTTERFLY
Maximum Profit Scenario Strike Price of Lower Strike Short Call - Strike Price of Lower Strike Long Call - Net Premium Paid Adjacent strikes - Net premium debit.
Maximum Loss Scenario Strike Price of Lower Strike Long Call - Strike Price of Lower Strike Short Call - Net Premium Received + Commissions Paid Net Premium Paid
Risk Limited Limited
Reward Limited Limited

SHORT CALL CONDOR SPREAD Vs LONG CALL BUTTERFLY - Strategy Pros & Cons

SHORT CALL CONDOR SPREAD LONG CALL BUTTERFLY
Similar Strategies Short Strangle -
Disadvantage • Amount of profit is low in comparison with other strategies. • As this strategy has 4 legs so the brokerage cost is higher that will affect your profit. • Due to limited lifespan of call options, you can lose the premium paid. • Limited profit which is bound in a narrow range between the two wing strikes.
Advantages • This strategy allows you to profit from highly volatile underlying assets moving in any direction. • Earn profit with little or no investment. • Wider profit zone. • Under this strategy, a trader can book profit even when there is not volatility in the market. • Limited risks to the net premium paid. • This strategy allows you to gain more profits by investing less and limiting your losses to minimum.

SHORT CALL CONDOR SPREAD

LONG CALL BUTTERFLY