Compare Strategies
| LONG CALL LADDER | BULL CALENDER SPREAD | |
|---|---|---|
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| About Strategy |
Long Call Ladder Option StrategyLong Call Ladder Strategy is an extension to Bull Call Spread Strategy. A trader will be slightly bullish about the market, in this strategy but bearish over volatility. It involves buying of an ITM Call Option and sale of 1 ATM & 1 OTM Call Options. However, the risk associated with this strategy is unlimited and reward is limited. |
Bull Calendar Spread Option StrategyThis strategy is implemented when a trader is bullish on the underlying stock/index in the short term say 2 months or so. A trader will write one Near Month OTM Call Option and buy one next Month OTM Call Option, thereby reducing the cost of purchase, with the same strike price of the same underlying asset. This strategy is used when a trader wants to make prof .. |
LONG CALL LADDER Vs BULL CALENDER SPREAD - Details
| LONG CALL LADDER | BULL CALENDER SPREAD | |
|---|---|---|
| Market View | Neutral | Bullish |
| Type (CE/PE) | CE (Call Option) | CE (Call Option) + PE (Put Option) |
| Number Of Positions | 3 | 2 |
| Strategy Level | Advance | Beginners |
| Reward Profile | Unlimited | Unlimited |
| Risk Profile | Unlimited | Limited |
| Breakeven Point | Upper Breakeven Point = Total Strike Prices of Short Calls - Strike Price of Long Call - Net Premium Paid, Lower Breakeven Point = Strike Price of Long Call + Net Premium Paid | Stock Price when long call value is equal to net debit. |
LONG CALL LADDER Vs BULL CALENDER SPREAD - When & How to use ?
| LONG CALL LADDER | BULL CALENDER SPREAD | |
|---|---|---|
| Market View | Neutral | Bullish |
| When to use? | This Strategy is an extension to Bull Call Spread Strategy. A trader will be slightly bullish about the market, in this strategy but bearish over volatility. | This strategy is used when a trader wants to make profit from a steady increase in the stock price over a short period of time. |
| Action | Buy 1 ITM Call, Sell 1 ATM Call, Sell 1 OTM Call | Sell 1 Near-Term OTM Call, Buy 1 Long-Term OTM Call |
| Breakeven Point | Upper Breakeven Point = Total Strike Prices of Short Calls - Strike Price of Long Call - Net Premium Paid, Lower Breakeven Point = Strike Price of Long Call + Net Premium Paid | Stock Price when long call value is equal to net debit. |
LONG CALL LADDER Vs BULL CALENDER SPREAD - Risk & Reward
| LONG CALL LADDER | BULL CALENDER SPREAD | |
|---|---|---|
| Maximum Profit Scenario | Strike Price of Lower Strike Short Call - Strike Price of Long Call - Net Premium Paid - Commissions Paid | You have unlimited profit potential to the upside. |
| Maximum Loss Scenario | Price of Underlying - Upper Breakeven Price + Commissions Paid | Max Loss = Premium Paid + Commissions Paid |
| Risk | Unlimited | Limited |
| Reward | Unlimited | Unlimited |
LONG CALL LADDER Vs BULL CALENDER SPREAD - Strategy Pros & Cons
| LONG CALL LADDER | BULL CALENDER SPREAD | |
|---|---|---|
| Similar Strategies | Short Strangle (Sell Strangle), Short Straddle (Sell Straddle) | The Collar, Bull Put Spread |
| Disadvantage | • Unlimited risk. • Margin required. | • Limited profit even if underlying asset rallies. • If the short call options are assigned when the underlying asset rallies then losses can be sustained. |
| Advantages | • Reduces capital outlay of bull call spread. • Wider maximum profit zone. • When there is decrease in implied volatility, this strategy can give profit. | • Limited losses to the net debit. • Enable trader to book profit even if underlying asset stays stagnant. • If the market trends reverse, cashing in from stock price movement at limited risk. |