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Comparision (LONG CALL CONDOR SPREAD VS RATIO CALL WRITE)

 

Compare Strategies

  LONG CALL CONDOR SPREAD RATIO CALL WRITE
About Strategy

Long Call Condor Spread Option Strategy 

This strategy is implemented when a trader is bearish on the volatility and expects the market to move sideways. Using Call Options of the same expiry date, he will buy one Deep ITM Call Option, sell 1 ITM Call Option, sell 1 OTM Call Option, buy 1 Deep OTM Call Option. The risk and reward both are limited due to offsetting of long and short positions. For t

Ratio Call Write Option Strategy 

This strategy involves buying of an underlying asset in the cash/futures market and simultaneously selling ATM Calls double the number of long quantity. This strategy is used by a trader who is neutral on the market and bearish on the volatility in the near future. Here profits will be capped up to the premium amount and risk will be potentially unlimited.

LONG CALL CONDOR SPREAD Vs RATIO CALL WRITE - Details

LONG CALL CONDOR SPREAD RATIO CALL WRITE
Market View Neutral Neutral
Type (CE/PE) CE (Call Option) CE (Call Option)
Number Of Positions 4 2
Strategy Level Advance Beginners
Reward Profile Limited Limited
Risk Profile Limited Unlimited
Breakeven Point Lower Breakeven = Lower Strike Price + Net Premium Upper breakeven = Higher Strike Price - Net Premium Upper Breakeven Point = Strike Price of Short Calls + Points of Maximum Profit, Lower Breakeven Point = Strike Price of Short Calls - Points of Maximum Profit

LONG CALL CONDOR SPREAD Vs RATIO CALL WRITE - When & How to use ?

LONG CALL CONDOR SPREAD RATIO CALL WRITE
Market View Neutral Neutral
When to use? This strategy works well when you expect the price of the underlying asset to be range bound in the coming days. This strategy is used by a trader who is neutral on the market and bearish on the volatility in the near future.
Action Buy Deep ITM Call Option, Buy Deep OTM Call Option, Sell ITM Call Option, Sell OTM Call Option Sell 2 ATM Calls
Breakeven Point Lower Breakeven = Lower Strike Price + Net Premium Upper breakeven = Higher Strike Price - Net Premium Upper Breakeven Point = Strike Price of Short Calls + Points of Maximum Profit, Lower Breakeven Point = Strike Price of Short Calls - Points of Maximum Profit

LONG CALL CONDOR SPREAD Vs RATIO CALL WRITE - Risk & Reward

LONG CALL CONDOR SPREAD RATIO CALL WRITE
Maximum Profit Scenario Strike Price of Lower Strike Short Call - Strike Price of Lower Strike Long Call - Net Premium Paid Net Premium Received - Commissions Paid
Maximum Loss Scenario Net Premium Paid Price of Underlying - Strike Price of Short Call - Net Premium Received OR Purchase Price of Underlying - Price of Underlying - Net Premium Received + Commissions Paid
Risk Limited Unlimited
Reward Limited Limited

LONG CALL CONDOR SPREAD Vs RATIO CALL WRITE - Strategy Pros & Cons

LONG CALL CONDOR SPREAD RATIO CALL WRITE
Similar Strategies Long Put Butterfly, Short Call Condor, Short Strangle Variable Ratio Write
Disadvantage • Amount of profit is comparatively low. • As this strategy has 4 legs so the brokerage cost is higher that will affect your profit. • Potential loss is higher than gain. • Limited profit.
Advantages • Capable to generate profit even if there is low volatility in the market. • This strategy is associated with limited risk and limited profit. • Wider profit zone.

LONG CALL CONDOR SPREAD

RATIO CALL WRITE