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Comparision (LONG COMBO VS LONG PUT LADDER)

 

Compare Strategies

  LONG COMBO LONG PUT LADDER
About Strategy

Long Combo Option Strategy 

Long Combo Option Trading Strategy is implemented when a trader is bullish in nature and expects the stock price to rise in the near future. Here a trader will sell one ‘Out of the Money’ Put Option and buy one ‘Out of the Money’ Call Option. This trade will require less capital to implement since the amount required to buy the call will be covered by the amount received

Long Put Ladder Option Strategy 

Long Put Ladder can be implemented when a trader is slightly bearish on the market and volatility. It involves buying of an ITM Put Option and sale of 1 ATM & 1 OTM Put Options. However, the risk associated with this strategy is unlimited and reward is limited.
Risk:< ..

LONG COMBO Vs LONG PUT LADDER - Details

LONG COMBO LONG PUT LADDER
Market View Bullish Neutral
Type (CE/PE) CE (Call Option) + PE (Put Option) PE (Put Option)
Number Of Positions 2 3
Strategy Level Advance Advance
Reward Profile Unlimited Limited
Risk Profile Unlimited Unlimited
Breakeven Point Call Strike + Net Premium Upper Breakeven Point = Strike Price of Long Put - Net Premium Paid, Lower Breakeven Point = Total Strike Prices of Short Puts - Strike Price of Long Put + Net Premium Paid

LONG COMBO Vs LONG PUT LADDER - When & How to use ?

LONG COMBO LONG PUT LADDER
Market View Bullish Neutral
When to use? This strategy is used when an investor Bullish on an underlying but don't have the required capital or the risk appetite to invest directly into it. This Strategy can be implemented when a trader is slightly bearish on the market and volatility.
Action Sell OTM Put Option, Buy OTM Call Option Buy 1 ITM Put, Sell 1 ATM Put, Sell 1 OTM Put
Breakeven Point Call Strike + Net Premium Upper Breakeven Point = Strike Price of Long Put - Net Premium Paid, Lower Breakeven Point = Total Strike Prices of Short Puts - Strike Price of Long Put + Net Premium Paid

LONG COMBO Vs LONG PUT LADDER - Risk & Reward

LONG COMBO LONG PUT LADDER
Maximum Profit Scenario Underlying asset goes up and Call option exercised Strike Price of Long Put - Strike Price of Higher Strike Short Put - Net Premium Paid - Commissions Paid
Maximum Loss Scenario Underlying asset goes down and Put option exercised When Price of Underlying < Total Strike Prices of Short Puts - Strike Price of Long Put + Net Premium Paid
Risk Unlimited Unlimited
Reward Unlimited Limited

LONG COMBO Vs LONG PUT LADDER - Strategy Pros & Cons

LONG COMBO LONG PUT LADDER
Similar Strategies - Short Strangle (Sell Strangle), Short Straddle (Sell Straddle)
Disadvantage • Losses can keep on increasing as the price of stock goes down. • High risk strategy. • Unlimited risk. • Margin required.
Advantages • Capital investment is low and returns are high. • Unlimited reward, returns keep on increasing with the increase on stock price. • Leverage facility provided by this strategy is very beneficial. • Reduces capital outlay of bear put spread. • Wider maximum profit zone. • When there is decrease in implied volatility, this strategy can give profit.

LONG COMBO

LONG PUT LADDER