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Comparision (SHORT CALL LADDER VS BULL PUT SPREAD)

 

Compare Strategies

  SHORT CALL LADDER BULL PUT SPREAD
About Strategy

Short Call Ladder Option Strategy 

This strategy is implemented when a trader is moderately bullish on the market, and volatility. It involves sale of an ITM Call Option, buying of an ATM Call Option & OTM Call Option. The risk associated with the strategy is limited.

Bull Put Spread Option Strategy

Bull Put Spread option trading strategy is used by a trader who is bullish in nature and expects the underlying asset to move in an upward trend in the near future. This strategy includes buying of an ‘Out of the Money’ Put Option and selling of ‘In the Money’ Put Option of the same underlying asset and the same expiration date. When you write a Put, you will receive prem ..

SHORT CALL LADDER Vs BULL PUT SPREAD - Details

SHORT CALL LADDER BULL PUT SPREAD
Market View Neutral Bullish
Type (CE/PE) CE (Call Option) PE (Put Option)
Number Of Positions 3 2
Strategy Level Advance Advance
Reward Profile Unlimited Limited
Risk Profile Limited Limited
Breakeven Point Upper Breakeven Point = Total Strike Prices of Long Calls - Strike Price of Short Call + Net Premium Received Lower Breakeven Point = Strike Price of Short Call - Net Premium Received Strike price of short put - net premium paid

SHORT CALL LADDER Vs BULL PUT SPREAD - When & How to use ?

SHORT CALL LADDER BULL PUT SPREAD
Market View Neutral Bullish
When to use? This strategy is implemented when a trader is moderately bullish on the market, and volatility Bull Put Spread strategy is used when you're of the view that the price of a particular underlying will rise, move sideways, or marginally fall.
Action Sell 1 ITM Call, Buy 1 ATM Call, Buy 1 OTM Call Buy OTM Put Option, Sell ITM Put Option
Breakeven Point Upper Breakeven Point = Total Strike Prices of Long Calls - Strike Price of Short Call + Net Premium Received Lower Breakeven Point = Strike Price of Short Call - Net Premium Received Strike price of short put - net premium paid

SHORT CALL LADDER Vs BULL PUT SPREAD - Risk & Reward

SHORT CALL LADDER BULL PUT SPREAD
Maximum Profit Scenario Profit Achieved When Price of Underlying > Total Strike Prices of Long Calls - Strike Price of Short Call + Net Premium Received Max Profit = Net Premium Received
Maximum Loss Scenario Strike Price of Lower Strike Long Call - Strike Price of Short Call - Net Premium Received + Commissions Paid Max Loss = (Strike Price Put 1 - Strike Price of Put 2) - Net Premium Received
Risk Limited Limited
Reward Unlimited Limited

SHORT CALL LADDER Vs BULL PUT SPREAD - Strategy Pros & Cons

SHORT CALL LADDER BULL PUT SPREAD
Similar Strategies Short Put Ladder, Strip, Strap Bull Call Spread, Bear Put Spread, Collar
Disadvantage • Unlimited risk. • Margin required. • Limited profit potential. • In loss situations, time decay may go against you.
Advantages • Higher probability of profit. • Unlimited upside profit. • Limited maximum loss. • Benefit from the time decay in profit positions but harmful in loss positions. • Profitable when underlying stock price rises, move sideways or marginal drop. • Reduce the downside risk.

SHORT CALL LADDER

BULL PUT SPREAD