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Comparision (SHORT CALL VS SHORT CALL CONDOR SPREAD)

 

Compare Strategies

  SHORT CALL SHORT CALL CONDOR SPREAD
About Strategy

Short Call Option Strategy

A trader shorts or writes a Call Option when he feels that underlying stock price is likely to go down. Selling Call Option is a strategy preferred for experienced traders.
However this strategy is very risky in nature. If the stock rallies on the upside, your risk becomes potentially unquantifiable and unlimited. If the strategy

Short Call Condor Spread Option Strategy

Short Call Condor Spread is the opposite of Long Call Condor Spread i.e. sell 1 Deep ITM Call Option, buy 1 ITM Call Option, buy 1 OTM Call Option, sell 1 Deep OTM Call Option. Similar to Long Call Condor, the risk and rewards associated with this strategy are limited. Credit is received at the time of entering into this strategy.

SHORT CALL Vs SHORT CALL CONDOR SPREAD - Details

SHORT CALL SHORT CALL CONDOR SPREAD
Market View Bearish Volatile
Type (CE/PE) CE (Call Option) CE (Call Option)
Number Of Positions 1 4
Strategy Level Advance Advance
Reward Profile Limited Limited
Risk Profile Unlimited Limited
Breakeven Point Strike Price of Short Call + Premium Received Lower Breakeven = Lower Strike Price + Net Premium, Upper breakeven = Higher Strike Price - Net Premium

SHORT CALL Vs SHORT CALL CONDOR SPREAD - When & How to use ?

SHORT CALL SHORT CALL CONDOR SPREAD
Market View Bearish Volatile
When to use? It is an aggressive strategy and involves huge risks. It should be used only in case where trader is certain about the bearish market view on the underlying. This strategy is used when an investor expect the price of the underlying stock to be very volatile.
Action Sell or Write Call Option Buy ITM Call Option + Buy OTM Call Option + Sell Deep OTM Call Option + Sell Deep ITM Call Option
Breakeven Point Strike Price of Short Call + Premium Received Lower Breakeven = Lower Strike Price + Net Premium, Upper breakeven = Higher Strike Price - Net Premium

SHORT CALL Vs SHORT CALL CONDOR SPREAD - Risk & Reward

SHORT CALL SHORT CALL CONDOR SPREAD
Maximum Profit Scenario Max Profit = Premium Received Strike Price of Lower Strike Short Call - Strike Price of Lower Strike Long Call - Net Premium Paid
Maximum Loss Scenario Loss Occurs When Price of Underlying > Strike Price of Short Call + Premium Received Strike Price of Lower Strike Long Call - Strike Price of Lower Strike Short Call - Net Premium Received + Commissions Paid
Risk Unlimited Limited
Reward Limited Limited

SHORT CALL Vs SHORT CALL CONDOR SPREAD - Strategy Pros & Cons

SHORT CALL SHORT CALL CONDOR SPREAD
Similar Strategies Covered Put, Covered Calls Short Strangle
Disadvantage • Unlimited risk to the upside underlying stocks. • Potential loss more than the premium collected. • Amount of profit is low in comparison with other strategies. • As this strategy has 4 legs so the brokerage cost is higher that will affect your profit.
Advantages • With the help of this strategy, traders can book profit from falling prices in the underlying asset. • Less investment, more profit. • Traders can book profit when underlying stock price fall, move sideways or rise by a small amount. • This strategy allows you to profit from highly volatile underlying assets moving in any direction. • Earn profit with little or no investment. • Wider profit zone.

SHORT CALL

SHORT CALL CONDOR SPREAD