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Comparision (SHORT PUT VS BULL CALENDER SPREAD )

 

Compare Strategies

  SHORT PUT BULL CALENDER SPREAD
About Strategy

Short Put Option Strategy

A trader will short put if he is bullish in nature and expects the underlying asset not to fall below a certain level.
Risk: Losses will be potentially unlimited if the stock skyrockets above the strike price of put.

Bull Calendar Spread Option Strategy

This strategy is implemented when a trader is bullish on the underlying stock/index in the short term say 2 months or so. A trader will write one Near Month OTM Call Option and buy one next Month OTM Call Option, thereby reducing the cost of purchase, with the same strike price of the same underlying asset. This strategy is used when a trader wants to make prof ..

SHORT PUT Vs BULL CALENDER SPREAD - Details

SHORT PUT BULL CALENDER SPREAD
Market View Bullish Bullish
Type (CE/PE) PE (Put Option) CE (Call Option) + PE (Put Option)
Number Of Positions 1 2
Strategy Level Beginners Beginners
Reward Profile Limited Unlimited
Risk Profile Unlimited Limited
Breakeven Point Strike Price - Premium Stock Price when long call value is equal to net debit.

SHORT PUT Vs BULL CALENDER SPREAD - When & How to use ?

SHORT PUT BULL CALENDER SPREAD
Market View Bullish Bullish
When to use? This strategy works well when you're Bullish that the price of the underlying will not fall beyond a certain level. This strategy is used when a trader wants to make profit from a steady increase in the stock price over a short period of time.
Action Sell Put Option Sell 1 Near-Term OTM Call, Buy 1 Long-Term OTM Call
Breakeven Point Strike Price - Premium Stock Price when long call value is equal to net debit.

SHORT PUT Vs BULL CALENDER SPREAD - Risk & Reward

SHORT PUT BULL CALENDER SPREAD
Maximum Profit Scenario Premium received in your account when you sell the Put Option. You have unlimited profit potential to the upside.
Maximum Loss Scenario Unlimited (When the price of the underlying falls.) Max Loss = Premium Paid + Commissions Paid
Risk Unlimited Limited
Reward Limited Unlimited

SHORT PUT Vs BULL CALENDER SPREAD - Strategy Pros & Cons

SHORT PUT BULL CALENDER SPREAD
Similar Strategies Bull Put Spread, Short Starddle The Collar, Bull Put Spread
Disadvantage • Unlimited risk. • Huge losses if the price of the underlying stock falls steeply. • Limited profit even if underlying asset rallies. • If the short call options are assigned when the underlying asset rallies then losses can be sustained.
Advantages • Benefit from time decay. • Less capital required than buying the stock outright. • Profit when underlying stock price rise, move sideways or drop by a relatively small account. • Limited losses to the net debit. • Enable trader to book profit even if underlying asset stays stagnant. • If the market trends reverse, cashing in from stock price movement at limited risk.

SHORT PUT

BULL CALENDER SPREAD