Compare Strategies
BEAR PUT SPREAD | DIAGONAL BULL CALL SPREAD | |
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About Strategy |
Bear Put Spread Option StrategyWhen a trader is moderately bearish on the market he can implement this strategy. Bear-Put-Spread involves buying of ITM Put Option and selling of an OTM Put Option. If prices fall, the ITM Put option starts making profits and the OTM Put option also adds to profit at a certain extent if the expiry price stays above the OTM strike. However, if it falls below the OTM |
Diagonal Bull Call Spread Option StrategyThis strategy is implemented by a trader when he is neutral – moderately bullish in the near-month contract and bullish in the mid-month contract. It involves sale of 1 Near-Month OTM Call Option and buying of 1 Mid Month ITM Call Option. Risk:
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BEAR PUT SPREAD Vs DIAGONAL BULL CALL SPREAD - Details
BEAR PUT SPREAD | DIAGONAL BULL CALL SPREAD | |
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Market View | Bearish | Bullish |
Type (CE/PE) | PE (Put Option) | CE (Call Option) |
Number Of Positions | 2 | 2 |
Strategy Level | Advance | Beginners |
Reward Profile | Limited | Limited |
Risk Profile | Limited | Limited |
Breakeven Point | Strike Price of Long Put - Net Premium |
BEAR PUT SPREAD Vs DIAGONAL BULL CALL SPREAD - When & How to use ?
BEAR PUT SPREAD | DIAGONAL BULL CALL SPREAD | |
---|---|---|
Market View | Bearish | Bullish |
When to use? | The bear call spread options 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 | Buy ITM Put Option, Sell OTM Put Option | Buy 1 Long-Term ITM Call Sell 1 Near-Term OTM Call |
Breakeven Point | Strike Price of Long Put - Net Premium |
BEAR PUT SPREAD Vs DIAGONAL BULL CALL SPREAD - Risk & Reward
BEAR PUT SPREAD | DIAGONAL BULL CALL SPREAD | |
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Maximum Profit Scenario | Max Profit = Strike Price of Long Put - Strike Price of Short Put - Net Premium Paid. | |
Maximum Loss Scenario | Max Loss = Net Premium Paid. | |
Risk | Limited | Limited |
Reward | Limited | Limited |
BEAR PUT SPREAD Vs DIAGONAL BULL CALL SPREAD - Strategy Pros & Cons
BEAR PUT SPREAD | DIAGONAL BULL CALL SPREAD | |
---|---|---|
Similar Strategies | Bear Call Spread, Bull Call Spread | Bull Put Spread |
Disadvantage | • Limited profit. • Early assignment risk. | |
Advantages | • If the strike price, expiration date or underlying stocks are rightly chosen then risk of losses would be limited to the net premium paid. • This strategy works well in declining markets. • Limited risk. |