Compare Strategies
LONG COMBO | SHORT CALL CONDOR SPREAD | |
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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 |
Short Call Condor Spread Option StrategyShort Call Condor Spread is the opposite of Long Call Condor Spread i.e. sell 1 Deep ITM Call Option, buy 1 ITM Call Option, buy 1 OTM Call Option, sell 1 Deep OTM Call Option. Similar to Long Call Condor, the risk and rewards associated with this strategy are limited. Credit is received at the time of entering into this strategy. |
LONG COMBO Vs SHORT CALL CONDOR SPREAD - Details
LONG COMBO | SHORT CALL CONDOR SPREAD | |
---|---|---|
Market View | Bullish | Volatile |
Type (CE/PE) | CE (Call Option) + PE (Put Option) | CE (Call Option) |
Number Of Positions | 2 | 4 |
Strategy Level | Advance | Advance |
Reward Profile | Unlimited | Limited |
Risk Profile | Unlimited | Limited |
Breakeven Point | Call Strike + Net Premium | Lower Breakeven = Lower Strike Price + Net Premium, Upper breakeven = Higher Strike Price - Net Premium |
LONG COMBO Vs SHORT CALL CONDOR SPREAD - When & How to use ?
LONG COMBO | SHORT CALL CONDOR SPREAD | |
---|---|---|
Market View | Bullish | Volatile |
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 is used when an investor expect the price of the underlying stock to be very volatile. |
Action | Sell OTM Put Option, Buy OTM Call Option | Buy ITM Call Option + Buy OTM Call Option + Sell Deep OTM Call Option + Sell Deep ITM Call Option |
Breakeven Point | Call Strike + Net Premium | Lower Breakeven = Lower Strike Price + Net Premium, Upper breakeven = Higher Strike Price - Net Premium |
LONG COMBO Vs SHORT CALL CONDOR SPREAD - Risk & Reward
LONG COMBO | SHORT CALL CONDOR SPREAD | |
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Maximum Profit Scenario | Underlying asset goes up and Call option exercised | Strike Price of Lower Strike Short Call - Strike Price of Lower Strike Long Call - Net Premium Paid |
Maximum Loss Scenario | Underlying asset goes down and Put option exercised | Strike Price of Lower Strike Long Call - Strike Price of Lower Strike Short Call - Net Premium Received + Commissions Paid |
Risk | Unlimited | Limited |
Reward | Unlimited | Limited |
LONG COMBO Vs SHORT CALL CONDOR SPREAD - Strategy Pros & Cons
LONG COMBO | SHORT CALL CONDOR SPREAD | |
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Similar Strategies | - | Short Strangle |
Disadvantage | • Losses can keep on increasing as the price of stock goes down. • High risk strategy. | • Amount of profit is low in comparison with other strategies. • As this strategy has 4 legs so the brokerage cost is higher that will affect your profit. |
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. | • This strategy allows you to profit from highly volatile underlying assets moving in any direction. • Earn profit with little or no investment. • Wider profit zone. |