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Comparision (CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY VS MARRIED PUT )

 

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  CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY MARRIED PUT
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

Married Put Option Strategy

This 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 ..

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs MARRIED PUT - Details

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY MARRIED PUT
Market View Bullish Bullish
Type (CE/PE) CE (Call Option) PE (Put Option)
Number Of Positions 4 1
Strategy Level Advance Beginners
Reward Profile Limited Unlimited
Risk Profile Limited Limited
Breakeven Point Lowest strike prices + premium paid – the half premium. Purchase Price of Underlying + Premium Paid

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs MARRIED PUT - When & How to use ?

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY MARRIED PUT
Market View Bullish Bullish
When to use? This Strategy is used when an investor wants potential returns. This Strategy work when the investor goes long in any stock. He expects the rise in market in future.
Action • Buy 1 call , • Sell 3 calls, • Buy 2 calls Buy 250 XYZ Shares, Buy 1 ATM Put Option
Breakeven Point Lowest strike prices + premium paid – the half premium. Purchase Price of Underlying + Premium Paid

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs MARRIED PUT - Risk & Reward

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY MARRIED PUT
Maximum Profit Scenario Equal middle strike price – lower strike price – the premium Profit = Price of Underlying - Purchase Price of Underlying - Premium Paid
Maximum Loss Scenario Net Debit paid for the strategy. Max Loss = Premium Paid + Commissions Paid
Risk Limited Limited
Reward Limited Unlimited

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs MARRIED PUT - Strategy Pros & Cons

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY MARRIED PUT
Similar Strategies CHRISTMAS TREE SPREAD WITH PUT OPTION Long Call
Disadvantage • Potential profit is lower or limited. Cost of the put options eats into profit margin.
Advantages • The potential of loss is limited. Unlimited Profit and Limited Risk

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY

MARRIED PUT