Comparision (STOCK REPAIR
VS CHRISTMAS TREE SPREAD WITH PUT OPTION)
Compare Strategies
STOCK REPAIR
CHRISTMAS TREE SPREAD WITH PUT OPTION
About Strategy
Stock Repair Option Strategy
Stock Repair Strategy is used to cover up for losses made on long stock position. After the long position suffered losses on stock price fall, a trader will implement this strategy in order to bring down the breakeven price and capping his further losses thereby increasing his probability of loss recovery.
This Strategy is an advance option strategy that consists of three legs and six total options. In this strategy buying one put at strike price D, skipping strike price C, writes three calls at strike price B, and buying two calls at strike price A for same expiration dates for neutral to bearish forecast. An investor used this strategy to potential returns ..
STOCK REPAIR Vs CHRISTMAS TREE SPREAD WITH PUT OPTION - Details
STOCK REPAIR
CHRISTMAS TREE SPREAD WITH PUT OPTION
Market View
Bullish
Bearish
Type (CE/PE)
CE (Call Option)
CE (Call Option)
Number Of Positions
3
6
Strategy Level
Beginners
Advance
Reward Profile
Unlimited
Limited
Risk Profile
Limited
Limited
Breakeven Point
Lowest strike prices + the half premium – premium paid
STOCK REPAIR Vs CHRISTMAS TREE SPREAD WITH PUT OPTION - When & How to use ?
STOCK REPAIR
CHRISTMAS TREE SPREAD WITH PUT OPTION
Market View
Bullish
Bearish
When to use?
Stock Repair Strategy is used to cover up for losses made on long stock position. After the long position suffered losses on stock price fall, a trader will implement this strategy in order to bring down the breakeven price and capping his further losses thereby increasing his probability of loss recovery.
This Strategy is used when an investor wants potential returns.
Action
Buy 1 ATM Call, Sell 2 OTM Calls
Buying one ATM, Selling 3 Puts, Buying one more OTM Put
Breakeven Point
Lowest strike prices + the half premium – premium paid
STOCK REPAIR Vs CHRISTMAS TREE SPREAD WITH PUT OPTION - Risk & Reward
STOCK REPAIR Vs CHRISTMAS TREE SPREAD WITH PUT OPTION - Strategy Pros & Cons
STOCK REPAIR
CHRISTMAS TREE SPREAD WITH PUT OPTION
Similar Strategies
Butterfly spreads
Disadvantage
• Management required with all the positions. • Additional loss due to continuous decline in shares as downside risk remains unchanged.
• Potential profit is lower or limited.
Advantages
• This strategy creates an opportunity to recover losses by lowering our breakeven. • No margin required. • No additional downside risk and costs nothing to put on.
