Comparision (DIAGONAL BULL CALL SPREAD
VS BULL PUT SPREAD)
Compare Strategies
DIAGONAL BULL CALL SPREAD
BULL PUT SPREAD
About Strategy
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.
Bull Put Spread option trading strategy is used by a trader who is bullish in nature and expects the underlying asset to move in an upward trend in the near future. This strategy includes buying of an ‘Out of the Money’ Put Option and selling of ‘In the Money’ Put Option of the same underlying asset and the same expiration date. When you write a Put, you will receive prem ..
DIAGONAL BULL CALL SPREAD Vs BULL PUT SPREAD - Risk & Reward
DIAGONAL BULL CALL SPREAD
BULL PUT SPREAD
Maximum Profit Scenario
Max Profit = Net Premium Received
Maximum Loss Scenario
Max Loss = (Strike Price Put 1 - Strike Price of Put 2) - Net Premium Received
Risk
Limited
Limited
Reward
Limited
Limited
DIAGONAL BULL CALL SPREAD Vs BULL PUT SPREAD - Strategy Pros & Cons
DIAGONAL BULL CALL SPREAD
BULL PUT SPREAD
Similar Strategies
Bull Put Spread
Bull Call Spread, Bear Put Spread, Collar
Disadvantage
• Limited profit potential. • In loss situations, time decay may go against you.
Advantages
• Benefit from the time decay in profit positions but harmful in loss positions. • Profitable when underlying stock price rises, move sideways or marginal drop. • Reduce the downside risk.