Compare Strategies
| DIAGONAL BULL CALL SPREAD | LONG CALL | |
|---|---|---|
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| About Strategy |
Diagonal Bull Call Spread Option StrategyThis 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. Risk:
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Long Call Option StrategyThis is one of the basic strategies as it involves entering into one position i.e. buying the Call Option only. Any investor who buys the Call Option will be bullish in nature and would be expecting the market to give decent returns in the near future. Risk:
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DIAGONAL BULL CALL SPREAD Vs LONG CALL - Details
| DIAGONAL BULL CALL SPREAD | LONG CALL | |
|---|---|---|
| Market View | Bullish | Bullish |
| Type (CE/PE) | CE (Call Option) | CE (Call Option) |
| Number Of Positions | 2 | 1 |
| Strategy Level | Beginners | Beginner Level |
| Reward Profile | Limited | Unlimited |
| Risk Profile | Limited | Limited |
| Breakeven Point | Strike Price + Premium |
DIAGONAL BULL CALL SPREAD Vs LONG CALL - When & How to use ?
| DIAGONAL BULL CALL SPREAD | LONG CALL | |
|---|---|---|
| Market View | Bullish | Bullish (Any investor who buys the Call Option will be bullish in nature and would be expecting the market to give decent returns in the near future.) |
| When to use? | This strategy work when an investor expect the underlying instrument move in upward direction. | |
| Action | Buy 1 Long-Term ITM Call Sell 1 Near-Term OTM Call | Buying Call option |
| Breakeven Point | Strike price + Premium |
DIAGONAL BULL CALL SPREAD Vs LONG CALL - Risk & Reward
| DIAGONAL BULL CALL SPREAD | LONG CALL | |
|---|---|---|
| Maximum Profit Scenario | Underlying Asset close above from the strike price on expiry. | |
| Maximum Loss Scenario | Premium Paid | |
| Risk | Limited | Limited |
| Reward | Limited | Unlimited |
DIAGONAL BULL CALL SPREAD Vs LONG CALL - Strategy Pros & Cons
| DIAGONAL BULL CALL SPREAD | LONG CALL | |
|---|---|---|
| Similar Strategies | Bull Put Spread | Protective Put |
| Disadvantage | • In this strategy, there is not protection against the underlying stock falling in value. • 100% loss if the strike price, expiration dates or underlying stocks are badly chosen. | |
| Advantages | • Less investment, more profit. • Unlimited profit with limited risk. • High leverage than simply owning the stock. |