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Comparision (SHORT PUT LADDER VS BEAR CALL SPREAD)

 

Compare Strategies

  SHORT PUT LADDER BEAR CALL SPREAD
About Strategy

Short Put Ladder Option Strategy 

This strategy is implemented when a trader is slightly bearish on the market. A trader is required to be bullish over the volatility in the market. It involves sale of an ITM Put Option and buying of 1 ATM & 1 OTM Put Options. However, the risk associated with this strategy is limited.

Bear Call Spread Option Strategy 

Bear Call Spread option trading strategy is used by a trader who is bearish in nature and expects the underlying asset to dip in the near future. This strategy includes buying of an ‘Out of the Money’ Call Option and selling one ‘In the Money’ Call Option of the same underlying asset and the same expiration date. When you write a call, you receive premium thereby r ..

SHORT PUT LADDER Vs BEAR CALL SPREAD - Details

SHORT PUT LADDER BEAR CALL SPREAD
Market View Neutral Bearish
Type (CE/PE) PE (Put Option) CE (Call Option)
Number Of Positions 3 2
Strategy Level Advance Beginners
Reward Profile Unlimited Limited
Risk Profile Limited Limited
Breakeven Point Upper Breakeven Point = Strike Price of Short Put - Net Premium Received Lower Breakeven Point = Total Strike Prices of Long Puts - Strike Price of Short Put + Net Premium Received Strike Price of Short Call + Net Premium Received

SHORT PUT LADDER Vs BEAR CALL SPREAD - When & How to use ?

SHORT PUT LADDER BEAR CALL SPREAD
Market View Neutral Bearish
When to use? This strategy is implemented when a trader is slightly bearish on the market. This strategy is used when you are bearish in market view. The strategy minimizes your risk in the event of prime movements going against your expectations.
Action Sell ITM Put Option, Buying 1 ATM & 1 OTM Put Option. Buy OTM Call Option, Sell ITM Call Option
Breakeven Point Upper Breakeven Point = Strike Price of Short Put - Net Premium Received Lower Breakeven Point = Total Strike Prices of Long Puts - Strike Price of Short Put + Net Premium Received Strike Price of Short Call + Net Premium Received

SHORT PUT LADDER Vs BEAR CALL SPREAD - Risk & Reward

SHORT PUT LADDER BEAR CALL SPREAD
Maximum Profit Scenario When Price of Underlying < Total Strike Prices of Long Puts - Strike Price of Short Put + Net Premium Received Max Profit = Net Premium Received - Commissions Paid
Maximum Loss Scenario Strike Price of Short Put - Strike Price of Higher Strike Long Put - Net Premium Received + Commissions Paid Maximum Loss = Long Call Strike Price - Short Call Strike Price - Net Premium Received
Risk Limited Limited
Reward Unlimited Limited

SHORT PUT LADDER Vs BEAR CALL SPREAD - Strategy Pros & Cons

SHORT PUT LADDER BEAR CALL SPREAD
Similar Strategies Strap, Strip Bear Put Spread, Bull Call Spread
Disadvantage • Best to use when you are confident about movement of market. • Small margin required. • Limited amount of profit. • Margin requirement, more commission charges.
Advantages • When there is surge in implied volatility, this strategy can give more profit. • Unlimited downside profit. • Limited risk and unlimited reward strategy. • This strategy takes advantage of time decay. • Investors can get profit in a flat market scenario. • Investors can earn options premium income with a lower degree of risk.

SHORT PUT LADDER

BEAR CALL SPREAD