Compare Strategies
SHORT PUT | BULL CALENDER SPREAD | |
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About Strategy |
Short Put Option StrategyA trader will short put if he is bullish in nature and expects the underlying asset not to fall below a certain level. Risk: Losses will be potentially unlimited if the stock skyrockets above the strike price of put. |
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 .. |
SHORT PUT Vs BULL CALENDER SPREAD - Details
SHORT PUT | 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 | 1 | 2 |
Strategy Level | Beginners | Beginners |
Reward Profile | Limited | Unlimited |
Risk Profile | Unlimited | Limited |
Breakeven Point | Strike Price - Premium | Stock Price when long call value is equal to net debit. |
SHORT PUT Vs BULL CALENDER SPREAD - When & How to use ?
SHORT PUT | BULL CALENDER SPREAD | |
---|---|---|
Market View | Bullish | Bullish |
When to use? | This strategy works well when you're Bullish that the price of the underlying will not fall beyond a certain level. | 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 | Sell Put Option | Sell 1 Near-Term OTM Call, Buy 1 Long-Term OTM Call |
Breakeven Point | Strike Price - Premium | Stock Price when long call value is equal to net debit. |
SHORT PUT Vs BULL CALENDER SPREAD - Risk & Reward
SHORT PUT | BULL CALENDER SPREAD | |
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Maximum Profit Scenario | Premium received in your account when you sell the Put Option. | You have unlimited profit potential to the upside. |
Maximum Loss Scenario | Unlimited (When the price of the underlying falls.) | Max Loss = Premium Paid + Commissions Paid |
Risk | Unlimited | Limited |
Reward | Limited | Unlimited |
SHORT PUT Vs BULL CALENDER SPREAD - Strategy Pros & Cons
SHORT PUT | BULL CALENDER SPREAD | |
---|---|---|
Similar Strategies | Bull Put Spread, Short Starddle | The Collar, Bull Put Spread |
Disadvantage | • Unlimited risk. • Huge losses if the price of the underlying stock falls steeply. | • 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 time decay. • Less capital required than buying the stock outright. • Profit when underlying stock price rise, move sideways or drop by a relatively small account. | • 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. |