Compare Strategies
BULL PUT SPREAD | DIAGONAL BULL CALL SPREAD | |
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About Strategy |
Bull Put Spread Option StrategyBull Put Spread option trading strategy is used by a trader who is bullish in nature and expects the underlying asset to move in an upward trend in the near future. This strategy includes buying of an ‘Out of the Money’ Put Option and selling of ‘In the Money’ Put Option of the same underlying asset and the same expiration date. When you write a Put, you will receive prem |
Diagonal Bull Call Spread Option StrategyThis strategy is implemented by a trader when he is neutral – moderately bullish in the near-month contract and bullish in the mid-month contract. It involves sale of 1 Near-Month OTM Call Option and buying of 1 Mid Month ITM Call Option. Risk:
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BULL PUT SPREAD Vs DIAGONAL BULL CALL SPREAD - Details
BULL PUT SPREAD | DIAGONAL BULL CALL SPREAD | |
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Market View | Bullish | Bullish |
Type (CE/PE) | PE (Put Option) | CE (Call Option) |
Number Of Positions | 2 | 2 |
Strategy Level | Advance | Beginners |
Reward Profile | Limited | Limited |
Risk Profile | Limited | Limited |
Breakeven Point | Strike price of short put - net premium paid |
BULL PUT SPREAD Vs DIAGONAL BULL CALL SPREAD - When & How to use ?
BULL PUT SPREAD | DIAGONAL BULL CALL SPREAD | |
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Market View | Bullish | Bullish |
When to use? | Bull Put Spread strategy is used when you're of the view that the price of a particular underlying will rise, move sideways, or marginally fall. | |
Action | Buy OTM Put Option, Sell ITM Put Option | Buy 1 Long-Term ITM Call Sell 1 Near-Term OTM Call |
Breakeven Point | Strike price of short put - net premium paid |
BULL PUT SPREAD Vs DIAGONAL BULL CALL SPREAD - Risk & Reward
BULL PUT SPREAD | DIAGONAL BULL CALL SPREAD | |
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Maximum Profit Scenario | Max Profit = Net Premium Received | |
Maximum Loss Scenario | Max Loss = (Strike Price Put 1 - Strike Price of Put 2) - Net Premium Received | |
Risk | Limited | Limited |
Reward | Limited | Limited |
BULL PUT SPREAD Vs DIAGONAL BULL CALL SPREAD - Strategy Pros & Cons
BULL PUT SPREAD | DIAGONAL BULL CALL SPREAD | |
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Similar Strategies | Bull Call Spread, Bear Put Spread, Collar | Bull Put Spread |
Disadvantage | • Limited profit potential. • In loss situations, time decay may go against you. | |
Advantages | • Benefit from the time decay in profit positions but harmful in loss positions. • Profitable when underlying stock price rises, move sideways or marginal drop. • Reduce the downside risk. |