STOCK BROKER REVIEW | INVESTING | UPCOMING IPO | ALGO TRADING | TECHNICAL ANALYSIS

Comparision (CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY VS LONG PUT LADDER)

 

Compare Strategies

  CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY LONG PUT LADDER
About Strategy

Christmas Tree Spread with Call Option Strategy

This Strategy is an advance option strategy that consists of three legs and six total options. In this strategy buying one call at strike price A, skipping strike price B, writes three calls at strike price C, and buying two calls at strike price D for same expiration dates for neutral to bullish forecast. An investor used this strategy to potential retur

Long Put Ladder Option Strategy 

Long Put Ladder can be implemented when a trader is slightly bearish on the market and volatility. It involves buying of an ITM Put Option and sale of 1 ATM & 1 OTM Put Options. However, the risk associated with this strategy is unlimited and reward is limited.
Risk:< ..

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs LONG PUT LADDER - Details

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY LONG PUT LADDER
Market View Bullish Neutral
Type (CE/PE) CE (Call Option) PE (Put Option)
Number Of Positions 4 3
Strategy Level Advance Advance
Reward Profile Limited Limited
Risk Profile Limited Unlimited
Breakeven Point Lowest strike prices + premium paid – the half premium. Upper Breakeven Point = Strike Price of Long Put - Net Premium Paid, Lower Breakeven Point = Total Strike Prices of Short Puts - Strike Price of Long Put + Net Premium Paid

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs LONG PUT LADDER - When & How to use ?

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY LONG PUT LADDER
Market View Bullish Neutral
When to use? This Strategy is used when an investor wants potential returns. This Strategy can be implemented when a trader is slightly bearish on the market and volatility.
Action • Buy 1 call , • Sell 3 calls, • Buy 2 calls Buy 1 ITM Put, Sell 1 ATM Put, Sell 1 OTM Put
Breakeven Point Lowest strike prices + premium paid – the half premium. Upper Breakeven Point = Strike Price of Long Put - Net Premium Paid, Lower Breakeven Point = Total Strike Prices of Short Puts - Strike Price of Long Put + Net Premium Paid

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs LONG PUT LADDER - Risk & Reward

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY LONG PUT LADDER
Maximum Profit Scenario Equal middle strike price – lower strike price – the premium Strike Price of Long Put - Strike Price of Higher Strike Short Put - Net Premium Paid - Commissions Paid
Maximum Loss Scenario Net Debit paid for the strategy. When Price of Underlying < Total Strike Prices of Short Puts - Strike Price of Long Put + Net Premium Paid
Risk Limited Unlimited
Reward Limited Limited

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs LONG PUT LADDER - Strategy Pros & Cons

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY LONG PUT LADDER
Similar Strategies CHRISTMAS TREE SPREAD WITH PUT OPTION Short Strangle (Sell Strangle), Short Straddle (Sell Straddle)
Disadvantage • Potential profit is lower or limited. • Unlimited risk. • Margin required.
Advantages • The potential of loss is limited. • Reduces capital outlay of bear put spread. • Wider maximum profit zone. • When there is decrease in implied volatility, this strategy can give profit.

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY

LONG PUT LADDER