Compare Strategies
SHORT CALL | REVERSE IRON CONDOR | |
---|---|---|
![]() |
![]() |
|
About Strategy |
Short Call Option StrategyA trader shorts or writes a Call Option when he feels that underlying stock price is likely to go down. Selling Call Option is a strategy preferred for experienced traders. However this strategy is very risky in nature. If the stock rallies on the upside, your risk becomes potentially unquantifiable and unlimited. If the strategy |
Reverse Iron Condor Option StrategyReverse Iron Condor as the name suggests is the opposite of Iron Condors. In Reverse Iron Condor, a trader is bullish about volatility and expects the market to make a significant move in the near future in either direction. Here a trader will buy 1 OTM Call Option, sell 1 Deep OTM Call Option, buy 1 OTM Put Option, sell 1 Deep OTM Put Option. This strategy also .. |
SHORT CALL Vs REVERSE IRON CONDOR - Details
SHORT CALL | REVERSE IRON CONDOR | |
---|---|---|
Market View | Bearish | Neutral |
Type (CE/PE) | CE (Call Option) | CE (Call Option) + PE (Put Option) |
Number Of Positions | 1 | 4 |
Strategy Level | Advance | Advance |
Reward Profile | Limited | Limited |
Risk Profile | Unlimited | Limited |
Breakeven Point | Strike Price of Short Call + Premium Received | Upper Breakeven Point = Strike Price of Long Call + Net Premium Paid, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid |
SHORT CALL Vs REVERSE IRON CONDOR - When & How to use ?
SHORT CALL | REVERSE IRON CONDOR | |
---|---|---|
Market View | Bearish | Neutral |
When to use? | It is an aggressive strategy and involves huge risks. It should be used only in case where trader is certain about the bearish market view on the underlying. | In Reverse Iron Condor, a trader is bullish about volatility and expects the market to make a significant move in the near future in either direction |
Action | Sell or Write Call Option | Buy 1 OTM Put, Sell 1 OTM Put (Lower Strike), Buy 1 OTM Call, Sell 1 OTM Call (Higher Strike) |
Breakeven Point | Strike Price of Short Call + Premium Received | Upper Breakeven Point = Strike Price of Long Call + Net Premium Paid, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid |
SHORT CALL Vs REVERSE IRON CONDOR - Risk & Reward
SHORT CALL | REVERSE IRON CONDOR | |
---|---|---|
Maximum Profit Scenario | Max Profit = Premium Received | Strike Price of Short Call (or Long Put) - Strike Price of Long Call (or Short Put) - Net Premium Paid - Commissions Paid |
Maximum Loss Scenario | Loss Occurs When Price of Underlying > Strike Price of Short Call + Premium Received | Net Premium Paid + Commissions Paid |
Risk | Unlimited | Limited |
Reward | Limited | Limited |
SHORT CALL Vs REVERSE IRON CONDOR - Strategy Pros & Cons
SHORT CALL | REVERSE IRON CONDOR | |
---|---|---|
Similar Strategies | Covered Put, Covered Calls | Short Condor |
Disadvantage | • Unlimited risk to the upside underlying stocks. • Potential loss more than the premium collected. | • Potential loss is higher than gain. • Limited profit. |
Advantages | • With the help of this strategy, traders can book profit from falling prices in the underlying asset. • Less investment, more profit. • Traders can book profit when underlying stock price fall, move sideways or rise by a small amount. | • Able to profit whether stocks move in either direction up or down. • This strategy can be used by option traders who cannot use credit spreads. • Predictable maximum loss and profits. |