Comparision (REVERSE IRON CONDOR
VS BEAR CALL SPREAD)
Compare Strategies
REVERSE IRON CONDOR
BEAR CALL SPREAD
About Strategy
Reverse Iron Condor Option Strategy
Reverse Iron Condor as the name suggests is the opposite of Iron Condors. In Reverse Iron Condor, a trader is bullish about volatility and expects the market to make a significant move in the near future in either direction. Here a trader will buy 1 OTM Call Option, sell 1 Deep OTM Call Option, buy 1 OTM Put Option, sell 1 Deep OTM Put Option. This strategy also
Bear Call Spread option trading strategy is used by a trader who is bearish in nature and expects the underlying asset to dip in the near future. This strategy includes buying of an ‘Out of the Money’ Call Option and selling one ‘In the Money’ Call Option of the same underlying asset and the same expiration date. When you write a call, you receive premium thereby r ..
Upper Breakeven Point = Strike Price of Long Call + Net Premium Paid, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid
Strike Price of Short Call + Net Premium Received
REVERSE IRON CONDOR Vs BEAR CALL SPREAD - When & How to use ?
REVERSE IRON CONDOR
BEAR CALL SPREAD
Market View
Neutral
Bearish
When to use?
In Reverse Iron Condor, a trader is bullish about volatility and expects the market to make a significant move in the near future in either direction
This strategy is used when you are bearish in market view. The strategy minimizes your risk in the event of prime movements going against your expectations.
Upper Breakeven Point = Strike Price of Long Call + Net Premium Paid, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid
Strike Price of Short Call + Net Premium Received
REVERSE IRON CONDOR Vs BEAR CALL SPREAD - Risk & Reward
REVERSE IRON CONDOR
BEAR CALL SPREAD
Maximum Profit Scenario
Strike Price of Short Call (or Long Put) - Strike Price of Long Call (or Short Put) - Net Premium Paid - Commissions Paid
Max Profit = Net Premium Received - Commissions Paid
Maximum Loss Scenario
Net Premium Paid + Commissions Paid
Maximum Loss = Long Call Strike Price - Short Call Strike Price - Net Premium Received
Risk
Limited
Limited
Reward
Limited
Limited
REVERSE IRON CONDOR Vs BEAR CALL SPREAD - Strategy Pros & Cons
REVERSE IRON CONDOR
BEAR CALL SPREAD
Similar Strategies
Short Condor
Bear Put Spread, Bull Call Spread
Disadvantage
• Potential loss is higher than gain. • Limited profit.
• Limited amount of profit. • Margin requirement, more commission charges.
Advantages
• Able to profit whether stocks move in either direction up or down. • This strategy can be used by option traders who cannot use credit spreads. • Predictable maximum loss and profits.
• This strategy takes advantage of time decay. • Investors can get profit in a flat market scenario. • Investors can earn options premium income with a lower degree of risk.