Compare Strategies
CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY | LONG PUT LADDER | |
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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 |
Long Put Ladder Option StrategyLong 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:< .. |
CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs LONG PUT LADDER - Details
CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY | LONG PUT LADDER | |
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Market View | Bullish | Neutral |
Type (CE/PE) | CE (Call Option) | PE (Put Option) |
Number Of Positions | 4 | 3 |
Strategy Level | Advance | Advance |
Reward Profile | Limited | Limited |
Risk Profile | Limited | Unlimited |
Breakeven Point | Lowest strike prices + premium paid – the half 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 |
CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs LONG PUT LADDER - When & How to use ?
CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY | LONG PUT LADDER | |
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Market View | Bullish | Neutral |
When to use? | This Strategy is used when an investor wants potential returns. | This Strategy can be implemented when a trader is slightly bearish on the market and volatility. |
Action | • Buy 1 call , • Sell 3 calls, • Buy 2 calls | Buy 1 ITM Put, Sell 1 ATM Put, Sell 1 OTM Put |
Breakeven Point | Lowest strike prices + premium paid – the half 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 |
CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs LONG PUT LADDER - Risk & Reward
CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY | LONG PUT LADDER | |
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Maximum Profit Scenario | Equal middle strike price – lower strike price – the premium | Strike Price of Long Put - Strike Price of Higher Strike Short Put - Net Premium Paid - Commissions Paid |
Maximum Loss Scenario | Net Debit paid for the strategy. | When Price of Underlying < Total Strike Prices of Short Puts - Strike Price of Long Put + Net Premium Paid |
Risk | Limited | Unlimited |
Reward | Limited | Limited |
CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs LONG PUT LADDER - Strategy Pros & Cons
CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY | LONG PUT LADDER | |
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Similar Strategies | CHRISTMAS TREE SPREAD WITH PUT OPTION | Short Strangle (Sell Strangle), Short Straddle (Sell Straddle) |
Disadvantage | • Potential profit is lower or limited. | • Unlimited risk. • Margin required. |
Advantages | • The potential of loss is limited. | • Reduces capital outlay of bear put spread. • Wider maximum profit zone. • When there is decrease in implied volatility, this strategy can give profit. |