Compare Strategies
BEAR CALL SPREAD | CHRISTMAS TREE SPREAD WITH PUT OPTION | |
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About Strategy |
Bear Call Spread Option StrategyBear Call Spread option trading strategy is used by a trader who is bearish in nature and expects the underlying asset to dip in the near future. This strategy includes buying of an ‘Out of the Money’ Call Option and selling one ‘In the Money’ Call Option of the same underlying asset and the same expiration date. When you write a call, you receive premium thereby r |
Christmas Tree Spread with Puts Option StrategyThis Strategy is an advance option strategy that consists of three legs and six total options. In this strategy buying one put at strike price D, skipping strike price C, writes three calls at strike price B, and buying two calls at strike price A for same expiration dates for neutral to bearish forecast. An investor used this strategy to potential returns .. |
BEAR CALL SPREAD Vs CHRISTMAS TREE SPREAD WITH PUT OPTION - Details
BEAR CALL SPREAD | CHRISTMAS TREE SPREAD WITH PUT OPTION | |
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Market View | Bearish | Bearish |
Type (CE/PE) | CE (Call Option) | CE (Call Option) |
Number Of Positions | 2 | 6 |
Strategy Level | Beginners | Advance |
Reward Profile | Limited | Limited |
Risk Profile | Limited | Limited |
Breakeven Point | Strike Price of Short Call + Net Premium Received | Lowest strike prices + the half premium – premium paid |
BEAR CALL SPREAD Vs CHRISTMAS TREE SPREAD WITH PUT OPTION - When & How to use ?
BEAR CALL SPREAD | CHRISTMAS TREE SPREAD WITH PUT OPTION | |
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Market View | Bearish | Bearish |
When to use? | This 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. | This Strategy is used when an investor wants potential returns. |
Action | Buy OTM Call Option, Sell ITM Call Option | Buying one ATM, Selling 3 Puts, Buying one more OTM Put |
Breakeven Point | Strike Price of Short Call + Net Premium Received | Lowest strike prices + the half premium – premium paid |
BEAR CALL SPREAD Vs CHRISTMAS TREE SPREAD WITH PUT OPTION - Risk & Reward
BEAR CALL SPREAD | CHRISTMAS TREE SPREAD WITH PUT OPTION | |
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Maximum Profit Scenario | Max Profit = Net Premium Received - Commissions Paid | Equal middle strike price – higher strike price – the premium |
Maximum Loss Scenario | Maximum Loss = Long Call Strike Price - Short Call Strike Price - Net Premium Received | Net Debit paid for the strategy. |
Risk | Limited | Limited |
Reward | Limited | Limited |
BEAR CALL SPREAD Vs CHRISTMAS TREE SPREAD WITH PUT OPTION - Strategy Pros & Cons
BEAR CALL SPREAD | CHRISTMAS TREE SPREAD WITH PUT OPTION | |
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Similar Strategies | Bear Put Spread, Bull Call Spread | Butterfly spreads |
Disadvantage | • Limited amount of profit. • Margin requirement, more commission charges. | • Potential profit is lower or limited. |
Advantages | • This strategy takes advantage of time decay. • Investors can get profit in a flat market scenario. • Investors can earn options premium income with a lower degree of risk. | • The potential of loss is limited. |