Compare Strategies
SHORT CALL | SHORT CALL CONDOR SPREAD | |
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About Strategy |
Short Call Option StrategyA trader shorts or writes a Call Option when he feels that underlying stock price is likely to go down. Selling Call Option is a strategy preferred for experienced traders. However this strategy is very risky in nature. If the stock rallies on the upside, your risk becomes potentially unquantifiable and unlimited. If the strategy |
Short Call Condor Spread Option StrategyShort Call Condor Spread is the opposite of Long Call Condor Spread i.e. sell 1 Deep ITM Call Option, buy 1 ITM Call Option, buy 1 OTM Call Option, sell 1 Deep OTM Call Option. Similar to Long Call Condor, the risk and rewards associated with this strategy are limited. Credit is received at the time of entering into this strategy. |
SHORT CALL Vs SHORT CALL CONDOR SPREAD - Details
SHORT CALL | SHORT CALL CONDOR SPREAD | |
---|---|---|
Market View | Bearish | Volatile |
Type (CE/PE) | CE (Call Option) | CE (Call Option) |
Number Of Positions | 1 | 4 |
Strategy Level | Advance | Advance |
Reward Profile | Limited | Limited |
Risk Profile | Unlimited | Limited |
Breakeven Point | Strike Price of Short Call + Premium Received | Lower Breakeven = Lower Strike Price + Net Premium, Upper breakeven = Higher Strike Price - Net Premium |
SHORT CALL Vs SHORT CALL CONDOR SPREAD - When & How to use ?
SHORT CALL | SHORT CALL CONDOR SPREAD | |
---|---|---|
Market View | Bearish | Volatile |
When to use? | It is an aggressive strategy and involves huge risks. It should be used only in case where trader is certain about the bearish market view on the underlying. | This strategy is used when an investor expect the price of the underlying stock to be very volatile. |
Action | Sell or Write Call Option | Buy ITM Call Option + Buy OTM Call Option + Sell Deep OTM Call Option + Sell Deep ITM Call Option |
Breakeven Point | Strike Price of Short Call + Premium Received | Lower Breakeven = Lower Strike Price + Net Premium, Upper breakeven = Higher Strike Price - Net Premium |
SHORT CALL Vs SHORT CALL CONDOR SPREAD - Risk & Reward
SHORT CALL | SHORT CALL CONDOR SPREAD | |
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Maximum Profit Scenario | Max Profit = Premium Received | Strike Price of Lower Strike Short Call - Strike Price of Lower Strike Long Call - Net Premium Paid |
Maximum Loss Scenario | Loss Occurs When Price of Underlying > Strike Price of Short Call + Premium Received | Strike Price of Lower Strike Long Call - Strike Price of Lower Strike Short Call - Net Premium Received + Commissions Paid |
Risk | Unlimited | Limited |
Reward | Limited | Limited |
SHORT CALL Vs SHORT CALL CONDOR SPREAD - Strategy Pros & Cons
SHORT CALL | SHORT CALL CONDOR SPREAD | |
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Similar Strategies | Covered Put, Covered Calls | Short Strangle |
Disadvantage | • Unlimited risk to the upside underlying stocks. • Potential loss more than the premium collected. | • Amount of profit is low in comparison with other strategies. • As this strategy has 4 legs so the brokerage cost is higher that will affect your profit. |
Advantages | • With the help of this strategy, traders can book profit from falling prices in the underlying asset. • Less investment, more profit. • Traders can book profit when underlying stock price fall, move sideways or rise by a small amount. | • This strategy allows you to profit from highly volatile underlying assets moving in any direction. • Earn profit with little or no investment. • Wider profit zone. |