Compare Strategies
BULL CALENDER SPREAD | SHORT PUT | |
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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 |
Short Put Option StrategyA trader will short put if he is bullish in nature and expects the underlying asset not to fall below a certain level. Risk: Losses will be potentially unlimited if the stock skyrockets above the strike price of put. |
BULL CALENDER SPREAD Vs SHORT PUT - Details
BULL CALENDER SPREAD | SHORT PUT | |
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Market View | Bullish | Bullish |
Type (CE/PE) | CE (Call Option) + PE (Put Option) | PE (Put Option) |
Number Of Positions | 2 | 1 |
Strategy Level | Beginners | Beginners |
Reward Profile | Unlimited | Limited |
Risk Profile | Limited | Unlimited |
Breakeven Point | Stock Price when long call value is equal to net debit. | Strike Price - Premium |
BULL CALENDER SPREAD Vs SHORT PUT - When & How to use ?
BULL CALENDER SPREAD | SHORT PUT | |
---|---|---|
Market View | Bullish | Bullish |
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 works well when you're Bullish that the price of the underlying will not fall beyond a certain level. |
Action | Sell 1 Near-Term OTM Call, Buy 1 Long-Term OTM Call | Sell Put Option |
Breakeven Point | Stock Price when long call value is equal to net debit. | Strike Price - Premium |
BULL CALENDER SPREAD Vs SHORT PUT - Risk & Reward
BULL CALENDER SPREAD | SHORT PUT | |
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Maximum Profit Scenario | You have unlimited profit potential to the upside. | Premium received in your account when you sell the Put Option. |
Maximum Loss Scenario | Max Loss = Premium Paid + Commissions Paid | Unlimited (When the price of the underlying falls.) |
Risk | Limited | Unlimited |
Reward | Unlimited | Limited |
BULL CALENDER SPREAD Vs SHORT PUT - Strategy Pros & Cons
BULL CALENDER SPREAD | SHORT PUT | |
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Similar Strategies | The Collar, Bull Put Spread | Bull Put Spread, Short Starddle |
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. • Huge losses if the price of the underlying stock falls steeply. |
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. | • Benefit from time decay. • Less capital required than buying the stock outright. • Profit when underlying stock price rise, move sideways or drop by a relatively small account. |