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Comparision (LONG CALL CONDOR SPREAD VS RATIO PUT WRITE)

 

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  LONG CALL CONDOR SPREAD RATIO PUT 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 Put Write Option Strategy 

This strategy is implemented by selling (short) the underlying asset in the cash/futures market. Simultaneously, sell ATM Puts double the number of long quantity. This strategy is used by a trader who in 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 PUT WRITE - Details

LONG CALL CONDOR SPREAD RATIO PUT WRITE
Market View Neutral Neutral
Type (CE/PE) CE (Call Option) PE (Put Option)
Number Of Positions 4 2
Strategy Level Advance Beginners
Reward Profile Limited Max Profit Achieved When Price of Underlying = Strike Price of Short Puts
Risk Profile Limited Loss Occurs When Price of Underlying < Strike Price of Short Put - Net Premium Received OR Price of Underlying > Strike Price of Short Put + Net Premium Received
Breakeven Point Lower Breakeven = Lower Strike Price + Net Premium Upper breakeven = Higher Strike Price - Net Premium Upper Breakeven Point = Strike Price of Short Puts + Points of Maximum Profit Lower Breakeven Point = Strike Price of Short Puts - Points of Maximum Profit

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

LONG CALL CONDOR SPREAD RATIO PUT 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 implemented by selling (short) the underlying asset in the cash/futures market. This strategy is used by a trader who in 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 Puts
Breakeven Point Lower Breakeven = Lower Strike Price + Net Premium Upper breakeven = Higher Strike Price - Net Premium Upper Breakeven Point = Strike Price of Short Puts + Points of Maximum Profit Lower Breakeven Point = Strike Price of Short Puts - Points of Maximum Profit

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

LONG CALL CONDOR SPREAD RATIO PUT 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 - Sale Price of Underlying - Net Premium Received OR Strike Price of Short Put - Price of Underlying - Net Premium Received + Commissions Paid
Risk Limited Unlimited
Reward Limited Limited

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

LONG CALL CONDOR SPREAD RATIO PUT WRITE
Similar Strategies Long Put Butterfly, Short Call Condor, Short Strangle Short Strangle and Short Straddle
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 PUT WRITE