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Comparision (CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY VS SHORT CALL LADDER)

 

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  CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY SHORT CALL LADDER
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

Short Call Ladder Option Strategy 

This strategy is implemented when a trader is moderately bullish on the market, and volatility. It involves sale of an ITM Call Option, buying of an ATM Call Option & OTM Call Option. The risk associated with the strategy is limited.

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs SHORT CALL LADDER - Details

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY SHORT CALL LADDER
Market View Bullish Neutral
Type (CE/PE) CE (Call Option) CE (Call Option)
Number Of Positions 4 3
Strategy Level Advance Advance
Reward Profile Limited Unlimited
Risk Profile Limited Limited
Breakeven Point Lowest strike prices + premium paid – the half premium. Upper Breakeven Point = Total Strike Prices of Long Calls - Strike Price of Short Call + Net Premium Received Lower Breakeven Point = Strike Price of Short Call - Net Premium Received

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs SHORT CALL LADDER - When & How to use ?

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY SHORT CALL LADDER
Market View Bullish Neutral
When to use? This Strategy is used when an investor wants potential returns. This strategy is implemented when a trader is moderately bullish on the market, and volatility
Action • Buy 1 call , • Sell 3 calls, • Buy 2 calls Sell 1 ITM Call, Buy 1 ATM Call, Buy 1 OTM Call
Breakeven Point Lowest strike prices + premium paid – the half premium. Upper Breakeven Point = Total Strike Prices of Long Calls - Strike Price of Short Call + Net Premium Received Lower Breakeven Point = Strike Price of Short Call - Net Premium Received

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs SHORT CALL LADDER - Risk & Reward

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY SHORT CALL LADDER
Maximum Profit Scenario Equal middle strike price – lower strike price – the premium Profit Achieved When Price of Underlying > Total Strike Prices of Long Calls - Strike Price of Short Call + Net Premium Received
Maximum Loss Scenario Net Debit paid for the strategy. Strike Price of Lower Strike Long Call - Strike Price of Short Call - Net Premium Received + Commissions Paid
Risk Limited Limited
Reward Limited Unlimited

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs SHORT CALL LADDER - Strategy Pros & Cons

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY SHORT CALL LADDER
Similar Strategies CHRISTMAS TREE SPREAD WITH PUT OPTION Short Put Ladder, Strip, Strap
Disadvantage • Potential profit is lower or limited. • Unlimited risk. • Margin required.
Advantages • The potential of loss is limited. • Higher probability of profit. • Unlimited upside profit. • Limited maximum loss.

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY

SHORT CALL LADDER