Comparision (DIAGONAL BEAR PUT SPREAD
VS LONG CALL CONDOR SPREAD)
Compare Strategies
DIAGONAL BEAR PUT SPREAD
LONG CALL CONDOR SPREAD
About Strategy
Diagonal Bear Put Spread
When the trader is neutral – bearish in the near-month and bearish in the mid-month, he will apply Diagonal Bear Put Spread. This strategy involves buying Mid-Month ITM Put Options and selling (short/write) equal number of Near-Month OTM Put Options, of the same underlying asset. This strategy bags limited rewards with limited risk.
This strategy is implemented when a trader is bearish on the volatility and expects the market to move sideways. Using Call Options of the same expiry date, he will buy one Deep ITM Call Option, sell 1 ITM Call Option, sell 1 OTM Call Option, buy 1 Deep OTM Call Option. The risk and reward both are limited due to offsetting of long and short positions. For t ..
DIAGONAL BEAR PUT SPREAD Vs LONG CALL CONDOR SPREAD - Details
DIAGONAL BEAR PUT SPREAD
LONG CALL CONDOR SPREAD
Market View
Bearish
Neutral
Type (CE/PE)
PE (Put Option)
CE (Call Option)
Number Of Positions
2
4
Strategy Level
Beginners
Advance
Reward Profile
Limited
Limited
Risk Profile
Limited
Limited
Breakeven Point
This is a dynamic trade with many possible scenarios and future trades, it is impossible to calculate a breakeven.
Lower Breakeven = Lower Strike Price + Net Premium Upper breakeven = Higher Strike Price - Net Premium
DIAGONAL BEAR PUT SPREAD Vs LONG CALL CONDOR SPREAD - When & How to use ?
DIAGONAL BEAR PUT SPREAD
LONG CALL CONDOR SPREAD
Market View
Bearish
Neutral
When to use?
When the trader is neutral – bearish in the near-month and bearish in the mid-month, he will apply Diagonal Bear Put Spread. This strategy involves buying Mid-Month ITM Put Options and selling (short/write) equal number of Near-Month OTM Put Options, of the same underlying asset
This strategy works well when you expect the price of the underlying asset to be range bound in the coming days.
Action
Sell 1 Near-Month OTM Put Option, Buy 1 Mid-Month ITM Put Option
Buy Deep ITM Call Option, Buy Deep OTM Call Option, Sell ITM Call Option, Sell OTM Call Option
Breakeven Point
This is a dynamic trade with many possible scenarios and future trades, it is impossible to calculate a breakeven.
Lower Breakeven = Lower Strike Price + Net Premium Upper breakeven = Higher Strike Price - Net Premium
DIAGONAL BEAR PUT SPREAD Vs LONG CALL CONDOR SPREAD - Risk & Reward
DIAGONAL BEAR PUT SPREAD
LONG CALL CONDOR SPREAD
Maximum Profit Scenario
'Premiums received - Initial premium to execute + Strike price - Stock Price on final month
Strike Price of Lower Strike Short Call - Strike Price of Lower Strike Long Call - Net Premium Paid
Maximum Loss Scenario
When the stock trades up above the long-term put strike price.
Net Premium Paid
Risk
Limited
Limited
Reward
Limited
Limited
DIAGONAL BEAR PUT SPREAD Vs LONG CALL CONDOR SPREAD - Strategy Pros & Cons
DIAGONAL BEAR PUT SPREAD
LONG CALL CONDOR SPREAD
Similar Strategies
Bear Put Spread and Bear Call Spread
Long Put Butterfly, Short Call Condor, Short Strangle
Disadvantage
Higher commissions due to additional trades. , Changes maximum profit potential of call or put spreads.
• Amount of profit is comparatively low. • As this strategy has 4 legs so the brokerage cost is higher that will affect your profit.
Advantages
The Risk is limited.
• Capable to generate profit even if there is low volatility in the market. • This strategy is associated with limited risk and limited profit. • Wider profit zone.
