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Comparision (DIAGONAL BULL CALL SPREAD VS CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY)

 

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  DIAGONAL BULL CALL SPREAD CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY
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.

Christmas Tree Spread with Call Option Strategy

This 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 ..

DIAGONAL BULL CALL SPREAD Vs CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY - Details

DIAGONAL BULL CALL SPREAD CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY
Market View Bullish Bullish
Type (CE/PE) CE (Call Option) CE (Call Option)
Number Of Positions 2 4
Strategy Level Beginners Advance
Reward Profile Limited Limited
Risk Profile Limited Limited
Breakeven Point Lowest strike prices + premium paid – the half premium.

DIAGONAL BULL CALL SPREAD Vs CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY - When & How to use ?

DIAGONAL BULL CALL SPREAD CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY
Market View Bullish Bullish
When to use? This Strategy is used when an investor wants potential returns.
Action Buy 1 Long-Term ITM Call Sell 1 Near-Term OTM Call • Buy 1 call , • Sell 3 calls, • Buy 2 calls
Breakeven Point Lowest strike prices + premium paid – the half premium.

DIAGONAL BULL CALL SPREAD Vs CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY - Risk & Reward

DIAGONAL BULL CALL SPREAD 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 Limited Limited

DIAGONAL BULL CALL SPREAD Vs CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY - Strategy Pros & Cons

DIAGONAL BULL CALL SPREAD CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY
Similar Strategies Bull Put Spread CHRISTMAS TREE SPREAD WITH PUT OPTION
Disadvantage • Potential profit is lower or limited.
Advantages • The potential of loss is limited.

DIAGONAL BULL CALL SPREAD

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY