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Comparision (LONG PUT VS BULL CALENDER SPREAD )

 

Compare Strategies

  LONG PUT BULL CALENDER SPREAD
About Strategy

Long Put Option Strategy

This strategy is implemented by buying 1 Put Option i.e. a single position, when the person is bearish on the market and expects the market to move downwards in the near future.
Risk: The maximum loss will be the premium amount paid.<

Bull Calendar Spread Option Strategy

This 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 ..

LONG PUT Vs BULL CALENDER SPREAD - Details

LONG PUT BULL CALENDER SPREAD
Market View Bearish Bullish
Type (CE/PE) PE (Put Option) CE (Call Option) + PE (Put Option)
Number Of Positions 1 2
Strategy Level Beginners Beginners
Reward Profile Unlimited Unlimited
Risk Profile Limited Limited
Breakeven Point Strike Price of Long Put - Premium Paid Stock Price when long call value is equal to net debit.

LONG PUT Vs BULL CALENDER SPREAD - When & How to use ?

LONG PUT BULL CALENDER SPREAD
Market View Bearish Bullish
When to use? A long put option strategy works well when you're expecting the underlying asset to sharply decline or be volatile in near future. 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 Put Option Sell 1 Near-Term OTM Call, Buy 1 Long-Term OTM Call
Breakeven Point Strike Price of Long Put - Premium Paid Stock Price when long call value is equal to net debit.

LONG PUT Vs BULL CALENDER SPREAD - Risk & Reward

LONG PUT BULL CALENDER SPREAD
Maximum Profit Scenario Profit = Strike Price of Long Put - Premium Paid You have unlimited profit potential to the upside.
Maximum Loss Scenario Max Loss = Premium Paid + Commissions Paid Max Loss = Premium Paid + Commissions Paid
Risk Limited Limited
Reward Unlimited Unlimited

LONG PUT Vs BULL CALENDER SPREAD - Strategy Pros & Cons

LONG PUT BULL CALENDER SPREAD
Similar Strategies Protective Call, Short Put The Collar, Bull Put Spread
Disadvantage • 100% loss if strike price, expiration dates or underlying stocks are badly chosen. • Time decay. • 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 • Limited risk to the premium paid. • Less capital investment and more profit. • Unlimited profit potential with limited 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.

LONG PUT

BULL CALENDER SPREAD