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Comparision (BEAR PUT SPREAD VS DIAGONAL BULL CALL SPREAD)

 

Compare Strategies

  BEAR PUT SPREAD DIAGONAL BULL CALL SPREAD
About Strategy

Bear Put Spread Option Strategy 

When a trader is moderately bearish on the market he can implement this strategy. Bear-Put-Spread involves buying of ITM Put Option and selling of an OTM Put Option. If prices fall, the ITM Put option starts making profits and the OTM Put option also adds to profit at a certain extent if the expiry price stays above the OTM strike. However, if it falls below the OTM

Diagonal Bull Call Spread Option Strategy

This strategy is implemented by a trader when he is neutral – moderately bullish in the near-month contract and bullish in the mid-month contract. It involves sale of 1 Near-Month OTM Call Option and buying of 1 Mid Month ITM Call Option.

BEAR PUT SPREAD Vs DIAGONAL BULL CALL SPREAD - Details

BEAR PUT SPREAD DIAGONAL BULL CALL SPREAD
Market View Bearish Bullish
Type (CE/PE) PE (Put Option) CE (Call Option)
Number Of Positions 2 2
Strategy Level Advance Beginners
Reward Profile Limited Limited
Risk Profile Limited Limited
Breakeven Point Strike Price of Long Put - Net Premium

BEAR PUT SPREAD Vs DIAGONAL BULL CALL SPREAD - When & How to use ?

BEAR PUT SPREAD DIAGONAL BULL CALL SPREAD
Market View Bearish Bullish
When to use? The bear call spread options strategy is used when you are bearish in market view. The strategy minimizes your risk in the event of prime movements going against your expectations.
Action Buy ITM Put Option, Sell OTM Put Option Buy 1 Long-Term ITM Call Sell 1 Near-Term OTM Call
Breakeven Point Strike Price of Long Put - Net Premium

BEAR PUT SPREAD Vs DIAGONAL BULL CALL SPREAD - Risk & Reward

BEAR PUT SPREAD DIAGONAL BULL CALL SPREAD
Maximum Profit Scenario Max Profit = Strike Price of Long Put - Strike Price of Short Put - Net Premium Paid.
Maximum Loss Scenario Max Loss = Net Premium Paid.
Risk Limited Limited
Reward Limited Limited

BEAR PUT SPREAD Vs DIAGONAL BULL CALL SPREAD - Strategy Pros & Cons

BEAR PUT SPREAD DIAGONAL BULL CALL SPREAD
Similar Strategies Bear Call Spread, Bull Call Spread Bull Put Spread
Disadvantage • Limited profit. • Early assignment risk.
Advantages • If the strike price, expiration date or underlying stocks are rightly chosen then risk of losses would be limited to the net premium paid. • This strategy works well in declining markets. • Limited risk.

BEAR PUT SPREAD

DIAGONAL BULL CALL SPREAD