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Comparision (CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY VS SHORT CALL CONDOR SPREAD)

 

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  CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY SHORT CALL CONDOR SPREAD
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

Short Call Condor Spread Option Strategy

Short Call Condor Spread is the opposite of Long Call Condor Spread i.e. sell 1 Deep ITM Call Option, buy 1 ITM Call Option, buy 1 OTM Call Option, sell 1 Deep OTM Call Option. Similar to Long Call Condor, the risk and rewards associated with this strategy are limited. Credit is received at the time of entering into this strategy.

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs SHORT CALL CONDOR SPREAD - Details

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY SHORT CALL CONDOR SPREAD
Market View Bullish Volatile
Type (CE/PE) CE (Call Option) CE (Call Option)
Number Of Positions 4 4
Strategy Level Advance Advance
Reward Profile Limited Limited
Risk Profile Limited Limited
Breakeven Point Lowest strike prices + premium paid – the half premium. Lower Breakeven = Lower Strike Price + Net Premium, Upper breakeven = Higher Strike Price - Net Premium

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs SHORT CALL CONDOR SPREAD - When & How to use ?

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY SHORT CALL CONDOR SPREAD
Market View Bullish Volatile
When to use? This Strategy is used when an investor wants potential returns. This strategy is used when an investor expect the price of the underlying stock to be very volatile.
Action • Buy 1 call , • Sell 3 calls, • Buy 2 calls Buy ITM Call Option + Buy OTM Call Option + Sell Deep OTM Call Option + Sell Deep ITM Call Option
Breakeven Point Lowest strike prices + premium paid – the half premium. Lower Breakeven = Lower Strike Price + Net Premium, Upper breakeven = Higher Strike Price - Net Premium

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs SHORT CALL CONDOR SPREAD - Risk & Reward

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY SHORT CALL CONDOR SPREAD
Maximum Profit Scenario Equal middle strike price – lower strike price – the premium Strike Price of Lower Strike Short Call - Strike Price of Lower Strike Long Call - Net Premium Paid
Maximum Loss Scenario Net Debit paid for the strategy. Strike Price of Lower Strike Long Call - Strike Price of Lower Strike Short Call - Net Premium Received + Commissions Paid
Risk Limited Limited
Reward Limited Limited

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs SHORT CALL CONDOR SPREAD - Strategy Pros & Cons

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY SHORT CALL CONDOR SPREAD
Similar Strategies CHRISTMAS TREE SPREAD WITH PUT OPTION Short Strangle
Disadvantage • Potential profit is lower or limited. • Amount of profit is low in comparison with other strategies. • As this strategy has 4 legs so the brokerage cost is higher that will affect your profit.
Advantages • The potential of loss is limited. • This strategy allows you to profit from highly volatile underlying assets moving in any direction. • Earn profit with little or no investment. • Wider profit zone.

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY

SHORT CALL CONDOR SPREAD