Compare Strategies
| LONG CALL LADDER | MARRIED PUT | |
|---|---|---|
|
|
|
| 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. |
Married Put Option StrategyThis strategy is applied when trader goes long on the underlying asset i.e. he buys the stock in cash market. He has a bullish view and expects the market to rise in the near future, but simultaneously has the fear of downward movement of the markets. In order to cover his position from vulnerabilities he buys one ATM Put Option of the same underlying asset. Here, a trader wi .. |
LONG CALL LADDER Vs MARRIED PUT - Details
| LONG CALL LADDER | MARRIED PUT | |
|---|---|---|
| Market View | Neutral | Bullish |
| Type (CE/PE) | CE (Call Option) | PE (Put Option) |
| Number Of Positions | 3 | 1 |
| 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 | Purchase Price of Underlying + Premium Paid |
LONG CALL LADDER Vs MARRIED PUT - When & How to use ?
| LONG CALL LADDER | MARRIED PUT | |
|---|---|---|
| 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 work when the investor goes long in any stock. He expects the rise in market in future. |
| Action | Buy 1 ITM Call, Sell 1 ATM Call, Sell 1 OTM Call | Buy 250 XYZ Shares, Buy 1 ATM Put Option |
| 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 | Purchase Price of Underlying + Premium Paid |
LONG CALL LADDER Vs MARRIED PUT - Risk & Reward
| LONG CALL LADDER | MARRIED PUT | |
|---|---|---|
| Maximum Profit Scenario | Strike Price of Lower Strike Short Call - Strike Price of Long Call - Net Premium Paid - Commissions Paid | Profit = Price of Underlying - Purchase Price of Underlying - Premium Paid |
| 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 MARRIED PUT - Strategy Pros & Cons
| LONG CALL LADDER | MARRIED PUT | |
|---|---|---|
| Similar Strategies | Short Strangle (Sell Strangle), Short Straddle (Sell Straddle) | Long Call |
| Disadvantage | • Unlimited risk. • Margin required. | Cost of the put options eats into profit margin. |
| Advantages | • Reduces capital outlay of bull call spread. • Wider maximum profit zone. • When there is decrease in implied volatility, this strategy can give profit. | Unlimited Profit and Limited Risk |