Compare Strategies
CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY | SHORT CALL LADDER | |
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About Strategy |
Christmas Tree Spread with Call Option StrategyThis Strategy is an advance option strategy that consists of three legs and six total options. In this strategy buying one call at strike price A, skipping strike price B, writes three calls at strike price C, and buying two calls at strike price D for same expiration dates for neutral to bullish forecast. An investor used this strategy to potential retur |
Short Call Ladder Option StrategyThis strategy is implemented when a trader is moderately bullish on the market, and volatility. It involves sale of an ITM Call Option, buying of an ATM Call Option & OTM Call Option. The risk associated with the strategy is limited. Risk:
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CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs SHORT CALL LADDER - Details
CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY | SHORT CALL LADDER | |
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Market View | Bullish | Neutral |
Type (CE/PE) | CE (Call Option) | CE (Call Option) |
Number Of Positions | 4 | 3 |
Strategy Level | Advance | Advance |
Reward Profile | Limited | Unlimited |
Risk Profile | Limited | Limited |
Breakeven Point | Lowest strike prices + premium paid – the half premium. | Upper Breakeven Point = Total Strike Prices of Long Calls - Strike Price of Short Call + Net Premium Received Lower Breakeven Point = Strike Price of Short Call - Net Premium Received |
CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs SHORT CALL LADDER - When & How to use ?
CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY | SHORT CALL LADDER | |
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Market View | Bullish | Neutral |
When to use? | This Strategy is used when an investor wants potential returns. | This strategy is implemented when a trader is moderately bullish on the market, and volatility |
Action | • Buy 1 call , • Sell 3 calls, • Buy 2 calls | Sell 1 ITM Call, Buy 1 ATM Call, Buy 1 OTM Call |
Breakeven Point | Lowest strike prices + premium paid – the half premium. | Upper Breakeven Point = Total Strike Prices of Long Calls - Strike Price of Short Call + Net Premium Received Lower Breakeven Point = Strike Price of Short Call - Net Premium Received |
CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs SHORT CALL LADDER - Risk & Reward
CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY | SHORT CALL LADDER | |
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Maximum Profit Scenario | Equal middle strike price – lower strike price – the premium | Profit Achieved When Price of Underlying > Total Strike Prices of Long Calls - Strike Price of Short Call + Net Premium Received |
Maximum Loss Scenario | Net Debit paid for the strategy. | Strike Price of Lower Strike Long Call - Strike Price of Short Call - Net Premium Received + Commissions Paid |
Risk | Limited | Limited |
Reward | Limited | Unlimited |
CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs SHORT CALL LADDER - Strategy Pros & Cons
CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY | SHORT CALL LADDER | |
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Similar Strategies | CHRISTMAS TREE SPREAD WITH PUT OPTION | Short Put Ladder, Strip, Strap |
Disadvantage | • Potential profit is lower or limited. | • Unlimited risk. • Margin required. |
Advantages | • The potential of loss is limited. | • Higher probability of profit. • Unlimited upside profit. • Limited maximum loss. |