Compare Strategies
BEAR CALL SPREAD | SHORT CALL LADDER | |
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About Strategy |
Bear Call Spread Option StrategyBear Call Spread option trading strategy is used by a trader who is bearish in nature and expects the underlying asset to dip in the near future. This strategy includes buying of an ‘Out of the Money’ Call Option and selling one ‘In the Money’ Call Option of the same underlying asset and the same expiration date. When you write a call, you receive premium thereby r |
Short Call Ladder Option StrategyThis strategy is implemented when a trader is moderately bullish on the market, and volatility. It involves sale of an ITM Call Option, buying of an ATM Call Option & OTM Call Option. The risk associated with the strategy is limited. Risk:
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BEAR CALL SPREAD Vs SHORT CALL LADDER - Details
BEAR CALL SPREAD | SHORT CALL LADDER | |
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Market View | Bearish | Neutral |
Type (CE/PE) | CE (Call Option) | CE (Call Option) |
Number Of Positions | 2 | 3 |
Strategy Level | Beginners | Advance |
Reward Profile | Limited | Unlimited |
Risk Profile | Limited | Limited |
Breakeven Point | Strike Price of Short Call + Net Premium Received | Upper Breakeven Point = Total Strike Prices of Long Calls - Strike Price of Short Call + Net Premium Received Lower Breakeven Point = Strike Price of Short Call - Net Premium Received |
BEAR CALL SPREAD Vs SHORT CALL LADDER - When & How to use ?
BEAR CALL SPREAD | SHORT CALL LADDER | |
---|---|---|
Market View | Bearish | Neutral |
When to use? | This strategy is used when you are bearish in market view. The strategy minimizes your risk in the event of prime movements going against your expectations. | This strategy is implemented when a trader is moderately bullish on the market, and volatility |
Action | Buy OTM Call Option, Sell ITM Call Option | Sell 1 ITM Call, Buy 1 ATM Call, Buy 1 OTM Call |
Breakeven Point | Strike Price of Short Call + Net Premium Received | Upper Breakeven Point = Total Strike Prices of Long Calls - Strike Price of Short Call + Net Premium Received Lower Breakeven Point = Strike Price of Short Call - Net Premium Received |
BEAR CALL SPREAD Vs SHORT CALL LADDER - Risk & Reward
BEAR CALL SPREAD | SHORT CALL LADDER | |
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Maximum Profit Scenario | Max Profit = Net Premium Received - Commissions Paid | Profit Achieved When Price of Underlying > Total Strike Prices of Long Calls - Strike Price of Short Call + Net Premium Received |
Maximum Loss Scenario | Maximum Loss = Long Call Strike Price - Short Call Strike Price - Net Premium Received | Strike Price of Lower Strike Long Call - Strike Price of Short Call - Net Premium Received + Commissions Paid |
Risk | Limited | Limited |
Reward | Limited | Unlimited |
BEAR CALL SPREAD Vs SHORT CALL LADDER - Strategy Pros & Cons
BEAR CALL SPREAD | SHORT CALL LADDER | |
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Similar Strategies | Bear Put Spread, Bull Call Spread | Short Put Ladder, Strip, Strap |
Disadvantage | • Limited amount of profit. • Margin requirement, more commission charges. | • Unlimited risk. • Margin required. |
Advantages | • This strategy takes advantage of time decay. • Investors can get profit in a flat market scenario. • Investors can earn options premium income with a lower degree of risk. | • Higher probability of profit. • Unlimited upside profit. • Limited maximum loss. |