Compare Strategies
| STOCK REPAIR | CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY | |
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| About Strategy |
Stock Repair Option StrategyStock Repair Strategy is used to cover up for losses made on long stock position. After the long position suffered losses on stock price fall, a trader will implement this strategy in order to bring down the breakeven price and capping his further losses thereby increasing his probability of loss recovery. Suppose Mr. X has |
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 .. |
STOCK REPAIR Vs CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY - Details
| STOCK REPAIR | CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY | |
|---|---|---|
| Market View | Bullish | Bullish |
| Type (CE/PE) | CE (Call Option) | CE (Call Option) |
| Number Of Positions | 3 | 4 |
| Strategy Level | Beginners | Advance |
| Reward Profile | Unlimited | Limited |
| Risk Profile | Limited | Limited |
| Breakeven Point | Lowest strike prices + premium paid – the half premium. |
STOCK REPAIR Vs CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY - When & How to use ?
| STOCK REPAIR | CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY | |
|---|---|---|
| Market View | Bullish | Bullish |
| When to use? | Stock Repair Strategy is used to cover up for losses made on long stock position. After the long position suffered losses on stock price fall, a trader will implement this strategy in order to bring down the breakeven price and capping his further losses thereby increasing his probability of loss recovery. | This Strategy is used when an investor wants potential returns. |
| Action | Buy 1 ATM Call, Sell 2 OTM Calls | • Buy 1 call , • Sell 3 calls, • Buy 2 calls |
| Breakeven Point | Lowest strike prices + premium paid – the half premium. |
STOCK REPAIR Vs CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY - Risk & Reward
| STOCK REPAIR | CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY | |
|---|---|---|
| Maximum Profit Scenario | Equal middle strike price – lower strike price – the premium | |
| Maximum Loss Scenario | Net Debit paid for the strategy. | |
| Risk | Limited | Limited |
| Reward | Unlimited | Limited |
STOCK REPAIR Vs CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY - Strategy Pros & Cons
| STOCK REPAIR | CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY | |
|---|---|---|
| Similar Strategies | CHRISTMAS TREE SPREAD WITH PUT OPTION | |
| Disadvantage | • Management required with all the positions. • Additional loss due to continuous decline in shares as downside risk remains unchanged. | • Potential profit is lower or limited. |
| Advantages | • This strategy creates an opportunity to recover losses by lowering our breakeven. • No margin required. • No additional downside risk and costs nothing to put on. | • The potential of loss is limited. |