Compare Strategies
LONG COMBO | LONG PUT LADDER | |
---|---|---|
![]() |
![]() |
|
About Strategy |
Long Combo Option StrategyLong Combo Option Trading Strategy is implemented when a trader is bullish in nature and expects the stock price to rise in the near future. Here a trader will sell one ‘Out of the Money’ Put Option and buy one ‘Out of the Money’ Call Option. This trade will require less capital to implement since the amount required to buy the call will be covered by the amount received |
Long Put Ladder Option StrategyLong Put Ladder can be implemented when a trader is slightly bearish on the market and volatility. It involves buying of an ITM Put Option and sale of 1 ATM & 1 OTM Put Options. However, the risk associated with this strategy is unlimited and reward is limited. Risk:< .. |
LONG COMBO Vs LONG PUT LADDER - Details
LONG COMBO | LONG PUT LADDER | |
---|---|---|
Market View | Bullish | Neutral |
Type (CE/PE) | CE (Call Option) + PE (Put Option) | PE (Put Option) |
Number Of Positions | 2 | 3 |
Strategy Level | Advance | Advance |
Reward Profile | Unlimited | Limited |
Risk Profile | Unlimited | Unlimited |
Breakeven Point | Call Strike + Net Premium | Upper Breakeven Point = Strike Price of Long Put - Net Premium Paid, Lower Breakeven Point = Total Strike Prices of Short Puts - Strike Price of Long Put + Net Premium Paid |
LONG COMBO Vs LONG PUT LADDER - When & How to use ?
LONG COMBO | LONG PUT LADDER | |
---|---|---|
Market View | Bullish | Neutral |
When to use? | This strategy is used when an investor Bullish on an underlying but don't have the required capital or the risk appetite to invest directly into it. | This Strategy can be implemented when a trader is slightly bearish on the market and volatility. |
Action | Sell OTM Put Option, Buy OTM Call Option | Buy 1 ITM Put, Sell 1 ATM Put, Sell 1 OTM Put |
Breakeven Point | Call Strike + Net Premium | Upper Breakeven Point = Strike Price of Long Put - Net Premium Paid, Lower Breakeven Point = Total Strike Prices of Short Puts - Strike Price of Long Put + Net Premium Paid |
LONG COMBO Vs LONG PUT LADDER - Risk & Reward
LONG COMBO | LONG PUT LADDER | |
---|---|---|
Maximum Profit Scenario | Underlying asset goes up and Call option exercised | Strike Price of Long Put - Strike Price of Higher Strike Short Put - Net Premium Paid - Commissions Paid |
Maximum Loss Scenario | Underlying asset goes down and Put option exercised | When Price of Underlying < Total Strike Prices of Short Puts - Strike Price of Long Put + Net Premium Paid |
Risk | Unlimited | Unlimited |
Reward | Unlimited | Limited |
LONG COMBO Vs LONG PUT LADDER - Strategy Pros & Cons
LONG COMBO | LONG PUT LADDER | |
---|---|---|
Similar Strategies | - | Short Strangle (Sell Strangle), Short Straddle (Sell Straddle) |
Disadvantage | • Losses can keep on increasing as the price of stock goes down. • High risk strategy. | • Unlimited risk. • Margin required. |
Advantages | • Capital investment is low and returns are high. • Unlimited reward, returns keep on increasing with the increase on stock price. • Leverage facility provided by this strategy is very beneficial. | • Reduces capital outlay of bear put spread. • Wider maximum profit zone. • When there is decrease in implied volatility, this strategy can give profit. |