Compare Strategies
LONG PUT | LONG CALL LADDER | |
---|---|---|
![]() |
![]() |
|
About Strategy |
Long Put Option StrategyThis strategy is implemented by buying 1 Put Option i.e. a single position, when the person is bearish on the market and expects the market to move downwards in the near future. |
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. |
LONG PUT Vs LONG CALL LADDER - Details
LONG PUT | LONG CALL LADDER | |
---|---|---|
Market View | Bearish | Neutral |
Type (CE/PE) | PE (Put Option) | CE (Call Option) |
Number Of Positions | 1 | 3 |
Strategy Level | Beginners | Advance |
Reward Profile | Unlimited | Unlimited |
Risk Profile | Limited | Unlimited |
Breakeven Point | Strike Price of Long Put - Premium Paid | 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 |
LONG PUT Vs LONG CALL LADDER - When & How to use ?
LONG PUT | LONG CALL LADDER | |
---|---|---|
Market View | Bearish | Neutral |
When to use? | A long put option strategy works well when you're expecting the underlying asset to sharply decline or be volatile in near future. | 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. |
Action | Buy Put Option | Buy 1 ITM Call, Sell 1 ATM Call, Sell 1 OTM Call |
Breakeven Point | Strike Price of Long Put - Premium Paid | 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 |
LONG PUT Vs LONG CALL LADDER - Risk & Reward
LONG PUT | LONG CALL LADDER | |
---|---|---|
Maximum Profit Scenario | Profit = Strike Price of Long Put - Premium Paid | Strike Price of Lower Strike Short Call - Strike Price of Long Call - Net Premium Paid - Commissions Paid |
Maximum Loss Scenario | Max Loss = Premium Paid + Commissions Paid | Price of Underlying - Upper Breakeven Price + Commissions Paid |
Risk | Limited | Unlimited |
Reward | Unlimited | Unlimited |
LONG PUT Vs LONG CALL LADDER - Strategy Pros & Cons
LONG PUT | LONG CALL LADDER | |
---|---|---|
Similar Strategies | Protective Call, Short Put | Short Strangle (Sell Strangle), Short Straddle (Sell Straddle) |
Disadvantage | • 100% loss if strike price, expiration dates or underlying stocks are badly chosen. • Time decay. | • Unlimited risk. • Margin required. |
Advantages | • Limited risk to the premium paid. • Less capital investment and more profit. • Unlimited profit potential with limited risk. | • Reduces capital outlay of bull call spread. • Wider maximum profit zone. • When there is decrease in implied volatility, this strategy can give profit. |