Comparision (STOCK REPAIR
VS LONG CALL CONDOR SPREAD)
Compare Strategies
STOCK REPAIR
LONG CALL CONDOR SPREAD
About Strategy
Stock Repair Option Strategy
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 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 ..
Lower Breakeven = Lower Strike Price + Net Premium Upper breakeven = Higher Strike Price - Net Premium
STOCK REPAIR Vs LONG CALL CONDOR SPREAD - When & How to use ?
STOCK REPAIR
LONG CALL CONDOR SPREAD
Market View
Bullish
Neutral
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 works well when you expect the price of the underlying asset to be range bound in the coming days.
Action
Buy 1 ATM Call, Sell 2 OTM Calls
Buy Deep ITM Call Option, Buy Deep OTM Call Option, Sell ITM Call Option, Sell OTM Call Option
Breakeven Point
Lower Breakeven = Lower Strike Price + Net Premium Upper breakeven = Higher Strike Price - Net Premium
STOCK REPAIR Vs LONG CALL CONDOR SPREAD - Risk & Reward
STOCK REPAIR
LONG CALL CONDOR SPREAD
Maximum Profit Scenario
Strike Price of Lower Strike Short Call - Strike Price of Lower Strike Long Call - Net Premium Paid
Maximum Loss Scenario
Net Premium Paid
Risk
Limited
Limited
Reward
Unlimited
Limited
STOCK REPAIR Vs LONG CALL CONDOR SPREAD - Strategy Pros & Cons
STOCK REPAIR
LONG CALL CONDOR SPREAD
Similar Strategies
Long Put Butterfly, Short Call Condor, Short Strangle
Disadvantage
• Management required with all the positions. • Additional loss due to continuous decline in shares as downside risk remains unchanged.
• Amount of profit is comparatively low. • As this strategy has 4 legs so the brokerage cost is higher that will affect your profit.
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.
• 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.
