Compare Strategies
LONG CALL | SHORT CALL LADDER | |
---|---|---|
![]() |
![]() |
|
About Strategy |
Long Call Option StrategyThis is one of the basic strategies as it involves entering into one position i.e. buying the Call Option only. Any investor who buys the Call Option will be bullish in nature and would be expecting the market to give decent returns in the near future. Risk:
|
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:
|
LONG CALL Vs SHORT CALL LADDER - Details
LONG CALL | SHORT CALL LADDER | |
---|---|---|
Market View | Bullish | Neutral |
Type (CE/PE) | CE (Call Option) | CE (Call Option) |
Number Of Positions | 1 | 3 |
Strategy Level | Beginner Level | Advance |
Reward Profile | Unlimited | Unlimited |
Risk Profile | Limited | Limited |
Breakeven Point | Strike Price + 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 |
LONG CALL Vs SHORT CALL LADDER - When & How to use ?
LONG CALL | SHORT CALL LADDER | |
---|---|---|
Market View | Bullish (Any investor who buys the Call Option will be bullish in nature and would be expecting the market to give decent returns in the near future.) | Neutral |
When to use? | This strategy work when an investor expect the underlying instrument move in upward direction. | This strategy is implemented when a trader is moderately bullish on the market, and volatility |
Action | Buying Call option | Sell 1 ITM Call, Buy 1 ATM Call, Buy 1 OTM Call |
Breakeven Point | Strike price + 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 |
LONG CALL Vs SHORT CALL LADDER - Risk & Reward
LONG CALL | SHORT CALL LADDER | |
---|---|---|
Maximum Profit Scenario | Underlying Asset close above from the strike price on expiry. | Profit Achieved When Price of Underlying > Total Strike Prices of Long Calls - Strike Price of Short Call + Net Premium Received |
Maximum Loss Scenario | Premium Paid | Strike Price of Lower Strike Long Call - Strike Price of Short Call - Net Premium Received + Commissions Paid |
Risk | Limited | Limited |
Reward | Unlimited | Unlimited |
LONG CALL Vs SHORT CALL LADDER - Strategy Pros & Cons
LONG CALL | SHORT CALL LADDER | |
---|---|---|
Similar Strategies | Protective Put | Short Put Ladder, Strip, Strap |
Disadvantage | • In this strategy, there is not protection against the underlying stock falling in value. • 100% loss if the strike price, expiration dates or underlying stocks are badly chosen. | • Unlimited risk. • Margin required. |
Advantages | • Less investment, more profit. • Unlimited profit with limited risk. • High leverage than simply owning the stock. | • Higher probability of profit. • Unlimited upside profit. • Limited maximum loss. |