Compare Strategies
LONG CALL LADDER | SHORT CALL CONDOR SPREAD | |
---|---|---|
About Strategy |
Long Call Ladder Option StrategyLong Call Ladder Strategy is an extension to Bull Call Spread Strategy. A trader will be slightly bullish about the market, in this strategy but bearish over volatility. It involves buying of an ITM Call Option and sale of 1 ATM & 1 OTM Call Options. However, the risk associated with this strategy is unlimited and reward is limited. |
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 CALL LADDER Vs SHORT CALL CONDOR SPREAD - Details
LONG CALL LADDER | SHORT CALL CONDOR SPREAD | |
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Market View | Neutral | Volatile |
Type (CE/PE) | CE (Call Option) | CE (Call Option) |
Number Of Positions | 3 | 4 |
Strategy Level | Advance | Advance |
Reward Profile | Unlimited | Limited |
Risk Profile | Unlimited | Limited |
Breakeven Point | Upper Breakeven Point = Total Strike Prices of Short Calls - Strike Price of Long Call - Net Premium Paid, Lower Breakeven Point = Strike Price of Long Call + Net Premium Paid | Lower Breakeven = Lower Strike Price + Net Premium, Upper breakeven = Higher Strike Price - Net Premium |
LONG CALL LADDER Vs SHORT CALL CONDOR SPREAD - When & How to use ?
LONG CALL LADDER | SHORT CALL CONDOR SPREAD | |
---|---|---|
Market View | Neutral | Volatile |
When to use? | This Strategy is an extension to Bull Call Spread Strategy. A trader will be slightly bullish about the market, in this strategy but bearish over volatility. | This strategy is used when an investor expect the price of the underlying stock to be very volatile. |
Action | Buy 1 ITM Call, Sell 1 ATM Call, Sell 1 OTM Call | Buy ITM Call Option + Buy OTM Call Option + Sell Deep OTM Call Option + Sell Deep ITM Call Option |
Breakeven Point | Upper Breakeven Point = Total Strike Prices of Short Calls - Strike Price of Long Call - Net Premium Paid, Lower Breakeven Point = Strike Price of Long Call + Net Premium Paid | Lower Breakeven = Lower Strike Price + Net Premium, Upper breakeven = Higher Strike Price - Net Premium |
LONG CALL LADDER Vs SHORT CALL CONDOR SPREAD - Risk & Reward
LONG CALL LADDER | SHORT CALL CONDOR SPREAD | |
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Maximum Profit Scenario | Strike Price of Lower Strike Short Call - Strike Price of Long Call - Net Premium Paid - Commissions Paid | Strike Price of Lower Strike Short Call - Strike Price of Lower Strike Long Call - Net Premium Paid |
Maximum Loss Scenario | Price of Underlying - Upper Breakeven Price + Commissions Paid | 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 CALL LADDER Vs SHORT CALL CONDOR SPREAD - Strategy Pros & Cons
LONG CALL LADDER | SHORT CALL CONDOR SPREAD | |
---|---|---|
Similar Strategies | Short Strangle (Sell Strangle), Short Straddle (Sell Straddle) | Short Strangle |
Disadvantage | • Unlimited risk. • Margin required. | • 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 | • Reduces capital outlay of bull call spread. • Wider maximum profit zone. • When there is decrease in implied volatility, this strategy can give profit. | • 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. |