Comparision (DIAGONAL BEAR PUT SPREAD
VS CHRISTMAS TREE SPREAD WITH PUT OPTION)
Compare Strategies
DIAGONAL BEAR PUT SPREAD
CHRISTMAS TREE SPREAD WITH PUT OPTION
About Strategy
Diagonal Bear Put Spread
When the trader is neutral – bearish in the near-month and bearish in the mid-month, he will apply Diagonal Bear Put Spread. This strategy involves buying Mid-Month ITM Put Options and selling (short/write) equal number of Near-Month OTM Put Options, of the same underlying asset. This strategy bags limited rewards with limited risk.
This Strategy is an advance option strategy that consists of three legs and six total options. In this strategy buying one put at strike price D, skipping strike price C, writes three calls at strike price B, and buying two calls at strike price A for same expiration dates for neutral to bearish forecast. An investor used this strategy to potential returns ..
DIAGONAL BEAR PUT SPREAD Vs CHRISTMAS TREE SPREAD WITH PUT OPTION - Details
DIAGONAL BEAR PUT SPREAD
CHRISTMAS TREE SPREAD WITH PUT OPTION
Market View
Bearish
Bearish
Type (CE/PE)
PE (Put Option)
CE (Call Option)
Number Of Positions
2
6
Strategy Level
Beginners
Advance
Reward Profile
Limited
Limited
Risk Profile
Limited
Limited
Breakeven Point
This is a dynamic trade with many possible scenarios and future trades, it is impossible to calculate a breakeven.
Lowest strike prices + the half premium – premium paid
DIAGONAL BEAR PUT SPREAD Vs CHRISTMAS TREE SPREAD WITH PUT OPTION - When & How to use ?
DIAGONAL BEAR PUT SPREAD
CHRISTMAS TREE SPREAD WITH PUT OPTION
Market View
Bearish
Bearish
When to use?
When the trader is neutral – bearish in the near-month and bearish in the mid-month, he will apply Diagonal Bear Put Spread. This strategy involves buying Mid-Month ITM Put Options and selling (short/write) equal number of Near-Month OTM Put Options, of the same underlying asset
This Strategy is used when an investor wants potential returns.
Action
Sell 1 Near-Month OTM Put Option, Buy 1 Mid-Month ITM Put Option
Buying one ATM, Selling 3 Puts, Buying one more OTM Put
Breakeven Point
This is a dynamic trade with many possible scenarios and future trades, it is impossible to calculate a breakeven.
Lowest strike prices + the half premium – premium paid
DIAGONAL BEAR PUT SPREAD Vs CHRISTMAS TREE SPREAD WITH PUT OPTION - Risk & Reward
DIAGONAL BEAR PUT SPREAD
CHRISTMAS TREE SPREAD WITH PUT OPTION
Maximum Profit Scenario
'Premiums received - Initial premium to execute + Strike price - Stock Price on final month
