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Comparision (BEAR CALL SPREAD VS SHORT PUT LADDER)

 

Compare Strategies

  BEAR CALL SPREAD SHORT PUT LADDER
About Strategy

Bear Call Spread Option Strategy 

Bear Call Spread option trading strategy is used by a trader who is bearish in nature and expects the underlying asset to dip in the near future. This strategy includes buying of an ‘Out of the Money’ Call Option and selling one ‘In the Money’ Call Option of the same underlying asset and the same expiration date. When you write a call, you receive premium thereby r

Short Put Ladder Option Strategy 

This strategy is implemented when a trader is slightly bearish on the market. A trader is required to be bullish over the volatility in the market. It involves sale of an ITM Put Option and buying of 1 ATM & 1 OTM Put Options. However, the risk associated with this strategy is limited.

BEAR CALL SPREAD Vs SHORT PUT LADDER - Details

BEAR CALL SPREAD SHORT PUT LADDER
Market View Bearish Neutral
Type (CE/PE) CE (Call Option) PE (Put Option)
Number Of Positions 2 3
Strategy Level Beginners Advance
Reward Profile Limited Unlimited
Risk Profile Limited Limited
Breakeven Point Strike Price of Short Call + Net Premium Received Upper Breakeven Point = Strike Price of Short Put - Net Premium Received Lower Breakeven Point = Total Strike Prices of Long Puts - Strike Price of Short Put + Net Premium Received

BEAR CALL SPREAD Vs SHORT PUT LADDER - When & How to use ?

BEAR CALL SPREAD SHORT PUT LADDER
Market View Bearish Neutral
When to use? This strategy is used when you are bearish in market view. The strategy minimizes your risk in the event of prime movements going against your expectations. This strategy is implemented when a trader is slightly bearish on the market.
Action Buy OTM Call Option, Sell ITM Call Option Sell ITM Put Option, Buying 1 ATM & 1 OTM Put Option.
Breakeven Point Strike Price of Short Call + Net Premium Received Upper Breakeven Point = Strike Price of Short Put - Net Premium Received Lower Breakeven Point = Total Strike Prices of Long Puts - Strike Price of Short Put + Net Premium Received

BEAR CALL SPREAD Vs SHORT PUT LADDER - Risk & Reward

BEAR CALL SPREAD SHORT PUT LADDER
Maximum Profit Scenario Max Profit = Net Premium Received - Commissions Paid When Price of Underlying < Total Strike Prices of Long Puts - Strike Price of Short Put + Net Premium Received
Maximum Loss Scenario Maximum Loss = Long Call Strike Price - Short Call Strike Price - Net Premium Received Strike Price of Short Put - Strike Price of Higher Strike Long Put - Net Premium Received + Commissions Paid
Risk Limited Limited
Reward Limited Unlimited

BEAR CALL SPREAD Vs SHORT PUT LADDER - Strategy Pros & Cons

BEAR CALL SPREAD SHORT PUT LADDER
Similar Strategies Bear Put Spread, Bull Call Spread Strap, Strip
Disadvantage • Limited amount of profit. • Margin requirement, more commission charges. • Best to use when you are confident about movement of market. • Small margin required.
Advantages • This strategy takes advantage of time decay. • Investors can get profit in a flat market scenario. • Investors can earn options premium income with a lower degree of risk. • When there is surge in implied volatility, this strategy can give more profit. • Unlimited downside profit. • Limited risk and unlimited reward strategy.

BEAR CALL SPREAD

SHORT PUT LADDER