Compare Strategies
CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY | SHORT PUT | |
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About Strategy |
Christmas Tree Spread with Call Option StrategyThis Strategy is an advance option strategy that consists of three legs and six total options. In this strategy buying one call at strike price A, skipping strike price B, writes three calls at strike price C, and buying two calls at strike price D for same expiration dates for neutral to bullish forecast. An investor used this strategy to potential retur |
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. |
CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs SHORT PUT - Details
CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY | SHORT PUT | |
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Market View | Bullish | Bullish |
Type (CE/PE) | CE (Call Option) | PE (Put Option) |
Number Of Positions | 4 | 1 |
Strategy Level | Advance | Beginners |
Reward Profile | Limited | Limited |
Risk Profile | Limited | Unlimited |
Breakeven Point | Lowest strike prices + premium paid – the half premium. | Strike Price - Premium |
CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs SHORT PUT - When & How to use ?
CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY | SHORT PUT | |
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Market View | Bullish | Bullish |
When to use? | This Strategy is used when an investor wants potential returns. | This strategy works well when you're Bullish that the price of the underlying will not fall beyond a certain level. |
Action | • Buy 1 call , • Sell 3 calls, • Buy 2 calls | Sell Put Option |
Breakeven Point | Lowest strike prices + premium paid – the half premium. | Strike Price - Premium |
CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs SHORT PUT - Risk & Reward
CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY | SHORT PUT | |
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Maximum Profit Scenario | Equal middle strike price – lower strike price – the premium | Premium received in your account when you sell the Put Option. |
Maximum Loss Scenario | Net Debit paid for the strategy. | Unlimited (When the price of the underlying falls.) |
Risk | Limited | Unlimited |
Reward | Limited | Limited |
CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs SHORT PUT - Strategy Pros & Cons
CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY | SHORT PUT | |
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Similar Strategies | CHRISTMAS TREE SPREAD WITH PUT OPTION | Bull Put Spread, Short Starddle |
Disadvantage | • Potential profit is lower or limited. | • Unlimited risk. • Huge losses if the price of the underlying stock falls steeply. |
Advantages | • The potential of loss is limited. | • 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. |