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Comparision (DIAGONAL BULL CALL SPREAD VS BEAR CALL SPREAD)

 

Compare Strategies

  DIAGONAL BULL CALL SPREAD BEAR CALL SPREAD
About Strategy

Diagonal Bull Call Spread Option Strategy

This 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.

Bear Call Spread Option Strategy 

Bear Call Spread option trading strategy is used by a trader who is bearish in nature and expects the underlying asset to dip in the near future. This strategy includes buying of an ‘Out of the Money’ Call Option and selling one ‘In the Money’ Call Option of the same underlying asset and the same expiration date. When you write a call, you receive premium thereby r ..

DIAGONAL BULL CALL SPREAD Vs BEAR CALL SPREAD - Details

DIAGONAL BULL CALL SPREAD BEAR CALL SPREAD
Market View Bullish Bearish
Type (CE/PE) CE (Call Option) CE (Call Option)
Number Of Positions 2 2
Strategy Level Beginners Beginners
Reward Profile Limited Limited
Risk Profile Limited Limited
Breakeven Point Strike Price of Short Call + Net Premium Received

DIAGONAL BULL CALL SPREAD Vs BEAR CALL SPREAD - When & How to use ?

DIAGONAL BULL CALL SPREAD BEAR CALL SPREAD
Market View Bullish Bearish
When to use? This strategy is used when you are bearish in market view. The strategy minimizes your risk in the event of prime movements going against your expectations.
Action Buy 1 Long-Term ITM Call Sell 1 Near-Term OTM Call Buy OTM Call Option, Sell ITM Call Option
Breakeven Point Strike Price of Short Call + Net Premium Received

DIAGONAL BULL CALL SPREAD Vs BEAR CALL SPREAD - Risk & Reward

DIAGONAL BULL CALL SPREAD BEAR CALL SPREAD
Maximum Profit Scenario Max Profit = Net Premium Received - Commissions Paid
Maximum Loss Scenario Maximum Loss = Long Call Strike Price - Short Call Strike Price - Net Premium Received
Risk Limited Limited
Reward Limited Limited

DIAGONAL BULL CALL SPREAD Vs BEAR CALL SPREAD - Strategy Pros & Cons

DIAGONAL BULL CALL SPREAD BEAR CALL SPREAD
Similar Strategies Bull Put Spread Bear Put Spread, Bull Call Spread
Disadvantage • Limited amount of profit. • Margin requirement, more commission charges.
Advantages • This strategy takes advantage of time decay. • Investors can get profit in a flat market scenario. • Investors can earn options premium income with a lower degree of risk.

DIAGONAL BULL CALL SPREAD

BEAR CALL SPREAD