Compare Strategies
SHORT PUT | BULL CALL SPREAD | |
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About Strategy |
Short Put Option StrategyA 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 Call Spread Option StrategyBull Call Spread option trading strategy is used by a trader who is bullish in nature and expects the underlying asset to give decent returns in the near future. This strategy includes buying of an ‘In The Money’ Call Option and selling of ‘Deep Out Of the Money’ Call Option of the same underlying asset and the same expiration date. .. |
SHORT PUT Vs BULL CALL SPREAD - Details
SHORT PUT | BULL CALL SPREAD | |
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Market View | Bullish | Bullish |
Type (CE/PE) | PE (Put Option) | CE (Call Option) |
Number Of Positions | 1 | 2 |
Strategy Level | Beginners | Beginners |
Reward Profile | Limited | Limited |
Risk Profile | Unlimited | Limited |
Breakeven Point | Strike Price - Premium | Strike price of purchased call + net premium paid |
SHORT PUT Vs BULL CALL SPREAD - When & How to use ?
SHORT PUT | BULL CALL 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 an investor is Bullish in the market but expect the underlying to gain mildly in near future. |
Action | Sell Put Option | Buy ITM Call Option, Sell OTM Call Option |
Breakeven Point | Strike Price - Premium | Strike price of purchased call + net premium paid |
SHORT PUT Vs BULL CALL SPREAD - Risk & Reward
SHORT PUT | BULL CALL SPREAD | |
---|---|---|
Maximum Profit Scenario | Premium received in your account when you sell the Put Option. | (Strike Price of Call 1 - Strike Price of Call 2) - Net Premium Paid |
Maximum Loss Scenario | Unlimited (When the price of the underlying falls.) | Net Premium Paid |
Risk | Unlimited | Limited |
Reward | Limited | Limited |
SHORT PUT Vs BULL CALL SPREAD - Strategy Pros & Cons
SHORT PUT | BULL CALL SPREAD | |
---|---|---|
Similar Strategies | Bull Put Spread, Short Starddle | Collar |
Disadvantage | • Unlimited risk. • Huge losses if the price of the underlying stock falls steeply. | • Limited profit potential to the higher strike call sold if the underlying stock price rises. • Maximum profit only if stock rises to the higher of 2 strike prices selected. |
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. | • Allows you to reduce risk and cost of your investment. • When placing the spread, exit strategy is pre-determined in advance. • Risk is limited to the net premium paid. |