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Comparision (LONG COMBO VS SHORT CALL CONDOR SPREAD)

 

Compare Strategies

  LONG COMBO SHORT CALL CONDOR SPREAD
About Strategy

Long Combo Option Strategy 

Long 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 Strategy

Short 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
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
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.

LONG COMBO

SHORT CALL CONDOR SPREAD