Compare Strategies
BULL PUT SPREAD | BULL CALENDER SPREAD | |
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About Strategy |
Bull Put Spread Option StrategyBull 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 |
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 .. |
BULL PUT SPREAD Vs BULL CALENDER SPREAD - Details
BULL PUT SPREAD | BULL CALENDER SPREAD | |
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Market View | Bullish | Bullish |
Type (CE/PE) | PE (Put Option) | CE (Call Option) + PE (Put Option) |
Number Of Positions | 2 | 2 |
Strategy Level | Advance | Beginners |
Reward Profile | Limited | Unlimited |
Risk Profile | Limited | Limited |
Breakeven Point | Strike price of short put - net premium paid | Stock Price when long call value is equal to net debit. |
BULL PUT SPREAD Vs BULL CALENDER SPREAD - When & How to use ?
BULL PUT SPREAD | BULL CALENDER SPREAD | |
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Market View | Bullish | Bullish |
When to use? | Bull Put Spread strategy is used when you're of the view that the price of a particular underlying will rise, move sideways, or marginally fall. | 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 OTM Put Option, Sell ITM Put Option | Sell 1 Near-Term OTM Call, Buy 1 Long-Term OTM Call |
Breakeven Point | Strike price of short put - net premium paid | Stock Price when long call value is equal to net debit. |
BULL PUT SPREAD Vs BULL CALENDER SPREAD - Risk & Reward
BULL PUT SPREAD | BULL CALENDER SPREAD | |
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Maximum Profit Scenario | Max Profit = Net Premium Received | You have unlimited profit potential to the upside. |
Maximum Loss Scenario | Max Loss = (Strike Price Put 1 - Strike Price of Put 2) - Net Premium Received | Max Loss = Premium Paid + Commissions Paid |
Risk | Limited | Limited |
Reward | Limited | Unlimited |
BULL PUT SPREAD Vs BULL CALENDER SPREAD - Strategy Pros & Cons
BULL PUT SPREAD | BULL CALENDER SPREAD | |
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Similar Strategies | Bull Call Spread, Bear Put Spread, Collar | The Collar, Bull Put Spread |
Disadvantage | • Limited profit potential. • In loss situations, time decay may go against you. | • 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 | • 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. | • 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. |