Compare Strategies
| DIAGONAL BULL CALL SPREAD | STOCK REPAIR | |
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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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Stock Repair Option StrategyStock 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. Suppose Mr. X has .. |
DIAGONAL BULL CALL SPREAD Vs STOCK REPAIR - Details
| DIAGONAL BULL CALL SPREAD | STOCK REPAIR | |
|---|---|---|
| Market View | Bullish | Bullish |
| Type (CE/PE) | CE (Call Option) | CE (Call Option) |
| Number Of Positions | 2 | 3 |
| Strategy Level | Beginners | Beginners |
| Reward Profile | Limited | Unlimited |
| Risk Profile | Limited | Limited |
| Breakeven Point |
DIAGONAL BULL CALL SPREAD Vs STOCK REPAIR - When & How to use ?
| DIAGONAL BULL CALL SPREAD | STOCK REPAIR | |
|---|---|---|
| Market View | Bullish | Bullish |
| 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. | |
| Action | Buy 1 Long-Term ITM Call Sell 1 Near-Term OTM Call | Buy 1 ATM Call, Sell 2 OTM Calls |
| Breakeven Point |
DIAGONAL BULL CALL SPREAD Vs STOCK REPAIR - Risk & Reward
| DIAGONAL BULL CALL SPREAD | STOCK REPAIR | |
|---|---|---|
| Maximum Profit Scenario | ||
| Maximum Loss Scenario | ||
| Risk | Limited | Limited |
| Reward | Limited | Unlimited |
DIAGONAL BULL CALL SPREAD Vs STOCK REPAIR - Strategy Pros & Cons
| DIAGONAL BULL CALL SPREAD | STOCK REPAIR | |
|---|---|---|
| Similar Strategies | Bull Put Spread | |
| Disadvantage | • Management required with all the positions. • Additional loss due to continuous decline in shares as downside risk remains unchanged. | |
| 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. |