Comparision (BULL PUT SPREAD
VS BULL CALENDER SPREAD )
Compare Strategies
BULL PUT SPREAD
BULL CALENDER SPREAD
About Strategy
Bull Put Spread Option Strategy
Bull Put Spread option trading strategy is used by a trader who is bullish in nature and expects the underlying asset to move in an upward trend in the near future. This strategy includes buying of an ‘Out of the Money’ Put Option and selling of ‘In the Money’ Put Option of the same underlying asset and the same expiration date. When you write a Put, you will receive prem
This strategy is implemented when a trader is bullish on the underlying stock/index in the short term say 2 months or so. A trader will write one Near Month OTM Call Option and buy one next Month OTM Call Option, thereby reducing the cost of purchase, with the same strike price of the same underlying asset. This strategy is used when a trader wants to make prof ..
Stock Price when long call value is equal to net debit.
BULL PUT SPREAD Vs BULL CALENDER SPREAD - Risk & Reward
BULL PUT SPREAD
BULL CALENDER SPREAD
Maximum Profit Scenario
Max Profit = Net Premium Received
You have unlimited profit potential to the upside.
Maximum Loss Scenario
Max Loss = (Strike Price Put 1 - Strike Price of Put 2) - Net Premium Received
Max Loss = Premium Paid + Commissions Paid
Risk
Limited
Limited
Reward
Limited
Unlimited
BULL PUT SPREAD Vs BULL CALENDER SPREAD - Strategy Pros & Cons
BULL PUT SPREAD
BULL CALENDER SPREAD
Similar Strategies
Bull Call Spread, Bear Put Spread, Collar
The Collar, Bull Put Spread
Disadvantage
• Limited profit potential. • In loss situations, time decay may go against you.
• Limited profit even if underlying asset rallies. • If the short call options are assigned when the underlying asset rallies then losses can be sustained.
Advantages
• Benefit from the time decay in profit positions but harmful in loss positions. • Profitable when underlying stock price rises, move sideways or marginal drop. • Reduce the downside risk.
• Limited losses to the net debit. • Enable trader to book profit even if underlying asset stays stagnant. • If the market trends reverse, cashing in from stock price movement at limited risk.