Compare Strategies
| DIAGONAL BEAR PUT SPREAD | CHRISTMAS TREE SPREAD WITH PUT OPTION | |
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| About Strategy |
Diagonal Bear Put SpreadWhen the trader is neutral – bearish in the near-month and bearish in the mid-month, he will apply Diagonal Bear Put Spread. This strategy involves buying Mid-Month ITM Put Options and selling (short/write) equal number of Near-Month OTM Put Options, of the same underlying asset. This strategy bags limited rewards with limited risk. |
Christmas Tree Spread with Puts Option StrategyThis Strategy is an advance option strategy that consists of three legs and six total options. In this strategy buying one put at strike price D, skipping strike price C, writes three calls at strike price B, and buying two calls at strike price A for same expiration dates for neutral to bearish forecast. An investor used this strategy to potential returns .. |
DIAGONAL BEAR PUT SPREAD Vs CHRISTMAS TREE SPREAD WITH PUT OPTION - Details
| DIAGONAL BEAR PUT SPREAD | CHRISTMAS TREE SPREAD WITH PUT OPTION | |
|---|---|---|
| Market View | Bearish | Bearish |
| Type (CE/PE) | PE (Put Option) | CE (Call Option) |
| Number Of Positions | 2 | 6 |
| Strategy Level | Beginners | Advance |
| Reward Profile | Limited | Limited |
| Risk Profile | Limited | Limited |
| Breakeven Point | This is a dynamic trade with many possible scenarios and future trades, it is impossible to calculate a breakeven. | Lowest strike prices + the half premium – premium paid |
DIAGONAL BEAR PUT SPREAD Vs CHRISTMAS TREE SPREAD WITH PUT OPTION - When & How to use ?
| DIAGONAL BEAR PUT SPREAD | CHRISTMAS TREE SPREAD WITH PUT OPTION | |
|---|---|---|
| Market View | Bearish | Bearish |
| When to use? | When the trader is neutral – bearish in the near-month and bearish in the mid-month, he will apply Diagonal Bear Put Spread. This strategy involves buying Mid-Month ITM Put Options and selling (short/write) equal number of Near-Month OTM Put Options, of the same underlying asset | This Strategy is used when an investor wants potential returns. |
| Action | Sell 1 Near-Month OTM Put Option, Buy 1 Mid-Month ITM Put Option | Buying one ATM, Selling 3 Puts, Buying one more OTM Put |
| Breakeven Point | This is a dynamic trade with many possible scenarios and future trades, it is impossible to calculate a breakeven. | Lowest strike prices + the half premium – premium paid |
DIAGONAL BEAR PUT SPREAD Vs CHRISTMAS TREE SPREAD WITH PUT OPTION - Risk & Reward
| DIAGONAL BEAR PUT SPREAD | CHRISTMAS TREE SPREAD WITH PUT OPTION | |
|---|---|---|
| Maximum Profit Scenario | 'Premiums received - Initial premium to execute + Strike price - Stock Price on final month | Equal middle strike price – higher strike price – the premium |
| Maximum Loss Scenario | When the stock trades up above the long-term put strike price. | Net Debit paid for the strategy. |
| Risk | Limited | Limited |
| Reward | Limited | Limited |
DIAGONAL BEAR PUT SPREAD Vs CHRISTMAS TREE SPREAD WITH PUT OPTION - Strategy Pros & Cons
| DIAGONAL BEAR PUT SPREAD | CHRISTMAS TREE SPREAD WITH PUT OPTION | |
|---|---|---|
| Similar Strategies | Bear Put Spread and Bear Call Spread | Butterfly spreads |
| Disadvantage | Higher commissions due to additional trades. , Changes maximum profit potential of call or put spreads. | • Potential profit is lower or limited. |
| Advantages | The Risk is limited. | • The potential of loss is limited. |