Compare Strategies
LONG STRADDLE | BULL PUT SPREAD | |
---|---|---|
![]() |
![]() |
|
About Strategy |
Long Straddle Option StrategyStraddle is neither bullish nor bearish strategy; it is a market neutral strategy. Here a trader wishes to take advantage of the volatility in the market. This strategy involves buying of one Call option and one Put option of the same strike price, same expiry date and of the same underlying asset. Now a trader is bound to make profits once stock moves in either direc |
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 .. |
LONG STRADDLE Vs BULL PUT SPREAD - Details
LONG STRADDLE | BULL PUT SPREAD | |
---|---|---|
Market View | Neutral | Bullish |
Type (CE/PE) | CE (Call Option) + PE (Put Option) | PE (Put Option) |
Number Of Positions | 2 | 2 |
Strategy Level | Beginners | Advance |
Reward Profile | Unlimited | Limited |
Risk Profile | Limited | Limited |
Breakeven Point | Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call + Net Premium | Strike price of short put - net premium paid |
LONG STRADDLE Vs BULL PUT SPREAD - When & How to use ?
LONG STRADDLE | BULL PUT SPREAD | |
---|---|---|
Market View | Neutral | Bullish |
When to use? | This options strategy is work well when and investor market view is bearish. The strategy minimizes your risk in the event of prime movements going against your expectations. | 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 Call Option, Buy Put Option | Buy OTM Put Option, Sell ITM Put Option |
Breakeven Point | Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call + Net Premium | Strike price of short put - net premium paid |
LONG STRADDLE Vs BULL PUT SPREAD - Risk & Reward
LONG STRADDLE | BULL PUT SPREAD | |
---|---|---|
Maximum Profit Scenario | Max profit is achieved when at one option is exercised. | Max Profit = Net Premium Received |
Maximum Loss Scenario | Maximum Loss = Net Premium Paid | Max Loss = (Strike Price Put 1 - Strike Price of Put 2) - Net Premium Received |
Risk | Limited | Limited |
Reward | Unlimited | Limited |
LONG STRADDLE Vs BULL PUT SPREAD - Strategy Pros & Cons
LONG STRADDLE | BULL PUT SPREAD | |
---|---|---|
Similar Strategies | Bear Put Spread | Bull Call Spread, Bear Put Spread, Collar |
Disadvantage | • There should be continuous movement of the stock and options price for this strategy to be profitable. • Time decay hurts long option if the strike price, expiration date or underlying stock are badly chosen. | • Limited profit potential. • In loss situations, time decay may go against you. |
Advantages | • Unlimited potential beyond the breakeven point in either direction . • Book your profit from highly volatile stocks without determining the direction. • Limited risk, more profit. | • 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. |