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Comparision (DIAGONAL BULL CALL SPREAD VS LONG PUT LADDER)

 

Compare Strategies

  DIAGONAL BULL CALL SPREAD LONG PUT LADDER
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.

Long Put Ladder Option Strategy 

Long Put Ladder can be implemented when a trader is slightly bearish on the market and volatility. It involves buying of an ITM Put Option and sale of 1 ATM & 1 OTM Put Options. However, the risk associated with this strategy is unlimited and reward is limited.
Risk:< ..

DIAGONAL BULL CALL SPREAD Vs LONG PUT LADDER - Details

DIAGONAL BULL CALL SPREAD LONG PUT LADDER
Market View Bullish Neutral
Type (CE/PE) CE (Call Option) PE (Put Option)
Number Of Positions 2 3
Strategy Level Beginners Advance
Reward Profile Limited Limited
Risk Profile Limited Unlimited
Breakeven Point Upper Breakeven Point = Strike Price of Long Put - Net Premium Paid, Lower Breakeven Point = Total Strike Prices of Short Puts - Strike Price of Long Put + Net Premium Paid

DIAGONAL BULL CALL SPREAD Vs LONG PUT LADDER - When & How to use ?

DIAGONAL BULL CALL SPREAD LONG PUT LADDER
Market View Bullish Neutral
When to use? This Strategy can be implemented when a trader is slightly bearish on the market and volatility.
Action Buy 1 Long-Term ITM Call Sell 1 Near-Term OTM Call Buy 1 ITM Put, Sell 1 ATM Put, Sell 1 OTM Put
Breakeven Point Upper Breakeven Point = Strike Price of Long Put - Net Premium Paid, Lower Breakeven Point = Total Strike Prices of Short Puts - Strike Price of Long Put + Net Premium Paid

DIAGONAL BULL CALL SPREAD Vs LONG PUT LADDER - Risk & Reward

DIAGONAL BULL CALL SPREAD LONG PUT LADDER
Maximum Profit Scenario Strike Price of Long Put - Strike Price of Higher Strike Short Put - Net Premium Paid - Commissions Paid
Maximum Loss Scenario When Price of Underlying < Total Strike Prices of Short Puts - Strike Price of Long Put + Net Premium Paid
Risk Limited Unlimited
Reward Limited Limited

DIAGONAL BULL CALL SPREAD Vs LONG PUT LADDER - Strategy Pros & Cons

DIAGONAL BULL CALL SPREAD LONG PUT LADDER
Similar Strategies Bull Put Spread Short Strangle (Sell Strangle), Short Straddle (Sell Straddle)
Disadvantage • Unlimited risk. • Margin required.
Advantages • Reduces capital outlay of bear put spread. • Wider maximum profit zone. • When there is decrease in implied volatility, this strategy can give profit.

DIAGONAL BULL CALL SPREAD

LONG PUT LADDER