Compare Strategies
| LONG CALL | DIAGONAL BULL CALL SPREAD | |
|---|---|---|
|
|
|
| About Strategy |
Long Call Option StrategyThis is one of the basic strategies as it involves entering into one position i.e. buying the Call Option only. Any investor who buys the Call Option will be bullish in nature and would be expecting the market to give decent returns in the near future. Risk:
|
Diagonal Bull Call Spread Option StrategyThis 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. Risk:
|
LONG CALL Vs DIAGONAL BULL CALL SPREAD - Details
| LONG CALL | DIAGONAL BULL CALL SPREAD | |
|---|---|---|
| Market View | Bullish | Bullish |
| Type (CE/PE) | CE (Call Option) | CE (Call Option) |
| Number Of Positions | 1 | 2 |
| Strategy Level | Beginner Level | Beginners |
| Reward Profile | Unlimited | Limited |
| Risk Profile | Limited | Limited |
| Breakeven Point | Strike Price + Premium |
LONG CALL Vs DIAGONAL BULL CALL SPREAD - When & How to use ?
| LONG CALL | DIAGONAL BULL CALL SPREAD | |
|---|---|---|
| Market View | Bullish (Any investor who buys the Call Option will be bullish in nature and would be expecting the market to give decent returns in the near future.) | Bullish |
| When to use? | This strategy work when an investor expect the underlying instrument move in upward direction. | |
| Action | Buying Call option | Buy 1 Long-Term ITM Call Sell 1 Near-Term OTM Call |
| Breakeven Point | Strike price + Premium |
LONG CALL Vs DIAGONAL BULL CALL SPREAD - Risk & Reward
| LONG CALL | DIAGONAL BULL CALL SPREAD | |
|---|---|---|
| Maximum Profit Scenario | Underlying Asset close above from the strike price on expiry. | |
| Maximum Loss Scenario | Premium Paid | |
| Risk | Limited | Limited |
| Reward | Unlimited | Limited |
LONG CALL Vs DIAGONAL BULL CALL SPREAD - Strategy Pros & Cons
| LONG CALL | DIAGONAL BULL CALL SPREAD | |
|---|---|---|
| Similar Strategies | Protective Put | Bull Put Spread |
| Disadvantage | • In this strategy, there is not protection against the underlying stock falling in value. • 100% loss if the strike price, expiration dates or underlying stocks are badly chosen. | |
| Advantages | • Less investment, more profit. • Unlimited profit with limited risk. • High leverage than simply owning the stock. |