Compare Strategies
DIAGONAL BULL CALL SPREAD | BULL PUT SPREAD | |
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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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Bull Put Spread Option StrategyBull Put Spread option trading strategy is used by a trader who is bullish in nature and expects the underlying asset to move in an upward trend in the near future. This strategy includes buying of an ‘Out of the Money’ Put Option and selling of ‘In the Money’ Put Option of the same underlying asset and the same expiration date. When you write a Put, you will receive prem .. |
DIAGONAL BULL CALL SPREAD Vs BULL PUT SPREAD - Details
DIAGONAL BULL CALL SPREAD | BULL PUT SPREAD | |
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Market View | Bullish | Bullish |
Type (CE/PE) | CE (Call Option) | PE (Put Option) |
Number Of Positions | 2 | 2 |
Strategy Level | Beginners | Advance |
Reward Profile | Limited | Limited |
Risk Profile | Limited | Limited |
Breakeven Point | Strike price of short put - net premium paid |
DIAGONAL BULL CALL SPREAD Vs BULL PUT SPREAD - When & How to use ?
DIAGONAL BULL CALL SPREAD | BULL PUT SPREAD | |
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Market View | Bullish | Bullish |
When to use? | Bull Put Spread strategy is used when you're of the view that the price of a particular underlying will rise, move sideways, or marginally fall. | |
Action | Buy 1 Long-Term ITM Call Sell 1 Near-Term OTM Call | Buy OTM Put Option, Sell ITM Put Option |
Breakeven Point | Strike price of short put - net premium paid |
DIAGONAL BULL CALL SPREAD Vs BULL PUT SPREAD - Risk & Reward
DIAGONAL BULL CALL SPREAD | BULL PUT SPREAD | |
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Maximum Profit Scenario | Max Profit = Net Premium Received | |
Maximum Loss Scenario | Max Loss = (Strike Price Put 1 - Strike Price of Put 2) - Net Premium Received | |
Risk | Limited | Limited |
Reward | Limited | Limited |
DIAGONAL BULL CALL SPREAD Vs BULL PUT SPREAD - Strategy Pros & Cons
DIAGONAL BULL CALL SPREAD | BULL PUT SPREAD | |
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Similar Strategies | Bull Put Spread | Bull Call Spread, Bear Put Spread, Collar |
Disadvantage | • Limited profit potential. • In loss situations, time decay may go against you. | |
Advantages | • Benefit from the time decay in profit positions but harmful in loss positions. • Profitable when underlying stock price rises, move sideways or marginal drop. • Reduce the downside risk. |