STOCK BROKER REVIEW | INVESTING | UPCOMING IPO | ALGO TRADING | TECHNICAL ANALYSIS

Comparision (DIAGONAL BULL CALL SPREAD VS BULL PUT SPREAD)

 

Compare Strategies

  DIAGONAL BULL CALL SPREAD BULL PUT SPREAD
About Strategy

Diagonal Bull Call Spread Option Strategy

This strategy is implemented by a trader when he is neutral – moderately bullish in the near-month contract and bullish in the mid-month contract. It involves sale of 1 Near-Month OTM Call Option and buying of 1 Mid Month ITM Call Option.

Bull Put Spread Option Strategy

Bull Put Spread option trading strategy is used by a trader who is bullish in nature and expects the underlying asset to move in an upward trend in the near future. This strategy includes buying of an ‘Out of the Money’ Put Option and selling of ‘In the Money’ Put Option of the same underlying asset and the same expiration date. When you write a Put, you will receive prem ..

DIAGONAL BULL CALL SPREAD Vs BULL PUT SPREAD - Details

DIAGONAL BULL CALL SPREAD BULL PUT SPREAD
Market View Bullish Bullish
Type (CE/PE) CE (Call Option) PE (Put Option)
Number Of Positions 2 2
Strategy Level Beginners Advance
Reward Profile Limited Limited
Risk Profile Limited Limited
Breakeven Point Strike price of short put - net premium paid

DIAGONAL BULL CALL SPREAD Vs BULL PUT SPREAD - When & How to use ?

DIAGONAL BULL CALL SPREAD BULL PUT SPREAD
Market View Bullish Bullish
When to use? Bull Put Spread strategy is used when you're of the view that the price of a particular underlying will rise, move sideways, or marginally fall.
Action Buy 1 Long-Term ITM Call Sell 1 Near-Term OTM Call Buy OTM Put Option, Sell ITM Put Option
Breakeven Point Strike price of short put - net premium paid

DIAGONAL BULL CALL SPREAD Vs BULL PUT SPREAD - Risk & Reward

DIAGONAL BULL CALL SPREAD BULL PUT SPREAD
Maximum Profit Scenario Max Profit = Net Premium Received
Maximum Loss Scenario Max Loss = (Strike Price Put 1 - Strike Price of Put 2) - Net Premium Received
Risk Limited Limited
Reward Limited Limited

DIAGONAL BULL CALL SPREAD Vs BULL PUT SPREAD - Strategy Pros & Cons

DIAGONAL BULL CALL SPREAD BULL PUT SPREAD
Similar Strategies Bull Put Spread Bull Call Spread, Bear Put Spread, Collar
Disadvantage • Limited profit potential. • In loss situations, time decay may go against you.
Advantages • Benefit from the time decay in profit positions but harmful in loss positions. • Profitable when underlying stock price rises, move sideways or marginal drop. • Reduce the downside risk.

DIAGONAL BULL CALL SPREAD

BULL PUT SPREAD