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Comparision (DIAGONAL BULL CALL SPREAD VS MARRIED PUT )

 

Compare Strategies

  DIAGONAL BULL CALL SPREAD MARRIED PUT
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.

Married Put Option Strategy

This strategy is applied when trader goes long on the underlying asset i.e. he buys the stock in cash market. He has a bullish view and expects the market to rise in the near future, but simultaneously has the fear of downward movement of the markets. In order to cover his position from vulnerabilities he buys one ATM Put Option of the same underlying asset. Here, a trader wi ..

DIAGONAL BULL CALL SPREAD Vs MARRIED PUT - Details

DIAGONAL BULL CALL SPREAD MARRIED PUT
Market View Bullish Bullish
Type (CE/PE) CE (Call Option) PE (Put Option)
Number Of Positions 2 1
Strategy Level Beginners Beginners
Reward Profile Limited Unlimited
Risk Profile Limited Limited
Breakeven Point Purchase Price of Underlying + Premium Paid

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

DIAGONAL BULL CALL SPREAD MARRIED PUT
Market View Bullish Bullish
When to use? This Strategy work when the investor goes long in any stock. He expects the rise in market in future.
Action Buy 1 Long-Term ITM Call Sell 1 Near-Term OTM Call Buy 250 XYZ Shares, Buy 1 ATM Put Option
Breakeven Point Purchase Price of Underlying + Premium Paid

DIAGONAL BULL CALL SPREAD Vs MARRIED PUT - Risk & Reward

DIAGONAL BULL CALL SPREAD MARRIED PUT
Maximum Profit Scenario Profit = Price of Underlying - Purchase Price of Underlying - Premium Paid
Maximum Loss Scenario Max Loss = Premium Paid + Commissions Paid
Risk Limited Limited
Reward Limited Unlimited

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

DIAGONAL BULL CALL SPREAD MARRIED PUT
Similar Strategies Bull Put Spread Long Call
Disadvantage Cost of the put options eats into profit margin.
Advantages Unlimited Profit and Limited Risk

DIAGONAL BULL CALL SPREAD

MARRIED PUT