Compare Strategies
IRON CONDORS | SHORT CALL LADDER | |
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About Strategy |
Iron Condors Option StrategyIron Condor is a neutral trading strategy. A trader tries to make profit from low volatility in the price of the underlying asset. This strategy will be better understood if you recall ‘Bull Put Spread’ & ‘Bear Call Spread’. A trader will buy one Deep OTM Put Option and sell one OTM Put Option,. He will also sell one OTM Call Option and buy one Deep OTM Call Option. |
Short Call Ladder Option StrategyThis strategy is implemented when a trader is moderately bullish on the market, and volatility. It involves sale of an ITM Call Option, buying of an ATM Call Option & OTM Call Option. The risk associated with the strategy is limited. Risk:
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IRON CONDORS Vs SHORT CALL LADDER - Details
IRON CONDORS | SHORT CALL LADDER | |
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Market View | Neutral | Neutral |
Type (CE/PE) | CE (Call Option) + PE (Put Option) | CE (Call Option) |
Number Of Positions | 4 | 3 |
Strategy Level | Advance | Advance |
Reward Profile | Limited | Unlimited |
Risk Profile | Limited | Limited |
Breakeven Point | Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received | Upper Breakeven Point = Total Strike Prices of Long Calls - Strike Price of Short Call + Net Premium Received Lower Breakeven Point = Strike Price of Short Call - Net Premium Received |
IRON CONDORS Vs SHORT CALL LADDER - When & How to use ?
IRON CONDORS | SHORT CALL LADDER | |
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Market View | Neutral | Neutral |
When to use? | When a trader tries to make profit from low volatility in the price of the underlying asset. | This strategy is implemented when a trader is moderately bullish on the market, and volatility |
Action | Sell 1 OTM Put, Buy 1 OTM Put (Lower Strike), Sell 1 OTM Call, Buy 1 OTM Call (Higher Strike) | Sell 1 ITM Call, Buy 1 ATM Call, Buy 1 OTM Call |
Breakeven Point | Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received | Upper Breakeven Point = Total Strike Prices of Long Calls - Strike Price of Short Call + Net Premium Received Lower Breakeven Point = Strike Price of Short Call - Net Premium Received |
IRON CONDORS Vs SHORT CALL LADDER - Risk & Reward
IRON CONDORS | SHORT CALL LADDER | |
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Maximum Profit Scenario | Net Premium Received - Commissions Paid | Profit Achieved When Price of Underlying > Total Strike Prices of Long Calls - Strike Price of Short Call + Net Premium Received |
Maximum Loss Scenario | Strike Price of Long Call - Strike Price of Short Call - Net Premium Received + Commissions Paid | Strike Price of Lower Strike Long Call - Strike Price of Short Call - Net Premium Received + Commissions Paid |
Risk | Limited | Limited |
Reward | Limited | Unlimited |
IRON CONDORS Vs SHORT CALL LADDER - Strategy Pros & Cons
IRON CONDORS | SHORT CALL LADDER | |
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Similar Strategies | Long Put Butterfly, Neutral Calendar Spread | Short Put Ladder, Strip, Strap |
Disadvantage | • Full of risk. • Unlimited maximum loss. | • Unlimited risk. • Margin required. |
Advantages | • Chance to gather double premium. • Sure, maximum gains on one-half the trade. • Flexible and double leverage at half price. | • Higher probability of profit. • Unlimited upside profit. • Limited maximum loss. |