Compare Strategies
IRON CONDORS | SHORT CALL | |
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About Strategy |
Iron Condors Option StrategyIron Condor is a neutral trading strategy. A trader tries to make profit from low volatility in the price of the underlying asset. This strategy will be better understood if you recall ‘Bull Put Spread’ & ‘Bear Call Spread’. A trader will buy one Deep OTM Put Option and sell one OTM Put Option,. He will also sell one OTM Call Option and buy one Deep OTM Call Option. |
Short Call Option StrategyA trader shorts or writes a Call Option when he feels that underlying stock price is likely to go down. Selling Call Option is a strategy preferred for experienced traders. However this strategy is very risky in nature. If the stock rallies on the upside, your risk becomes potentially unquantifiable and unlimited. If the strategy .. |
IRON CONDORS Vs SHORT CALL - Details
IRON CONDORS | SHORT CALL | |
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Market View | Neutral | Bearish |
Type (CE/PE) | CE (Call Option) + PE (Put Option) | CE (Call Option) |
Number Of Positions | 4 | 1 |
Strategy Level | Advance | Advance |
Reward Profile | Limited | Limited |
Risk Profile | Limited | Unlimited |
Breakeven Point | Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received | Strike Price of Short Call + Premium Received |
IRON CONDORS Vs SHORT CALL - When & How to use ?
IRON CONDORS | SHORT CALL | |
---|---|---|
Market View | Neutral | Bearish |
When to use? | When a trader tries to make profit from low volatility in the price of the underlying asset. | It is an aggressive strategy and involves huge risks. It should be used only in case where trader is certain about the bearish market view on the underlying. |
Action | Sell 1 OTM Put, Buy 1 OTM Put (Lower Strike), Sell 1 OTM Call, Buy 1 OTM Call (Higher Strike) | Sell or Write Call Option |
Breakeven Point | Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received | Strike Price of Short Call + Premium Received |
IRON CONDORS Vs SHORT CALL - Risk & Reward
IRON CONDORS | SHORT CALL | |
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Maximum Profit Scenario | Net Premium Received - Commissions Paid | Max Profit = Premium Received |
Maximum Loss Scenario | Strike Price of Long Call - Strike Price of Short Call - Net Premium Received + Commissions Paid | Loss Occurs When Price of Underlying > Strike Price of Short Call + Premium Received |
Risk | Limited | Unlimited |
Reward | Limited | Limited |
IRON CONDORS Vs SHORT CALL - Strategy Pros & Cons
IRON CONDORS | SHORT CALL | |
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Similar Strategies | Long Put Butterfly, Neutral Calendar Spread | Covered Put, Covered Calls |
Disadvantage | • Full of risk. • Unlimited maximum loss. | • Unlimited risk to the upside underlying stocks. • Potential loss more than the premium collected. |
Advantages | • Chance to gather double premium. • Sure, maximum gains on one-half the trade. • Flexible and double leverage at half price. | • With the help of this strategy, traders can book profit from falling prices in the underlying asset. • Less investment, more profit. • Traders can book profit when underlying stock price fall, move sideways or rise by a small amount. |