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Comparision (CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY VS DIAGONAL BULL CALL SPREAD)

 

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  CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY DIAGONAL BULL CALL SPREAD
About Strategy

Christmas Tree Spread with Call Option Strategy

This Strategy is an advance option strategy that consists of three legs and six total options. In this strategy buying one call at strike price A, skipping strike price B, writes three calls at strike price C, and buying two calls at strike price D for same expiration dates for neutral to bullish forecast. An investor used this strategy to potential retur

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.

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs DIAGONAL BULL CALL SPREAD - Details

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY DIAGONAL BULL CALL SPREAD
Market View Bullish Bullish
Type (CE/PE) CE (Call Option) CE (Call Option)
Number Of Positions 4 2
Strategy Level Advance Beginners
Reward Profile Limited Limited
Risk Profile Limited Limited
Breakeven Point Lowest strike prices + premium paid – the half premium.

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs DIAGONAL BULL CALL SPREAD - When & How to use ?

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY DIAGONAL BULL CALL SPREAD
Market View Bullish Bullish
When to use? This Strategy is used when an investor wants potential returns.
Action • Buy 1 call , • Sell 3 calls, • Buy 2 calls Buy 1 Long-Term ITM Call Sell 1 Near-Term OTM Call
Breakeven Point Lowest strike prices + premium paid – the half premium.

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs DIAGONAL BULL CALL SPREAD - Risk & Reward

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY DIAGONAL BULL CALL SPREAD
Maximum Profit Scenario Equal middle strike price – lower strike price – the premium
Maximum Loss Scenario Net Debit paid for the strategy.
Risk Limited Limited
Reward Limited Limited

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs DIAGONAL BULL CALL SPREAD - Strategy Pros & Cons

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY DIAGONAL BULL CALL SPREAD
Similar Strategies CHRISTMAS TREE SPREAD WITH PUT OPTION Bull Put Spread
Disadvantage • Potential profit is lower or limited.
Advantages • The potential of loss is limited.

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY

DIAGONAL BULL CALL SPREAD