Compare Strategies
REVERSE IRON CONDOR | BEAR CALL SPREAD | |
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About 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 |
Bear Call Spread Option StrategyBear Call Spread option trading strategy is used by a trader who is bearish in nature and expects the underlying asset to dip in the near future. This strategy includes buying of an ‘Out of the Money’ Call Option and selling one ‘In the Money’ Call Option of the same underlying asset and the same expiration date. When you write a call, you receive premium thereby r .. |
REVERSE IRON CONDOR Vs BEAR CALL SPREAD - Details
REVERSE IRON CONDOR | BEAR CALL SPREAD | |
---|---|---|
Market View | Neutral | Bearish |
Type (CE/PE) | CE (Call Option) + PE (Put Option) | CE (Call Option) |
Number Of Positions | 4 | 2 |
Strategy Level | Advance | Beginners |
Reward Profile | Limited | Limited |
Risk Profile | Limited | Limited |
Breakeven Point | Upper Breakeven Point = Strike Price of Long Call + Net Premium Paid, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid | Strike Price of Short Call + Net Premium Received |
REVERSE IRON CONDOR Vs BEAR CALL SPREAD - When & How to use ?
REVERSE IRON CONDOR | BEAR CALL SPREAD | |
---|---|---|
Market View | Neutral | Bearish |
When to use? | 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 | This strategy is used when you are bearish in market view. The strategy minimizes your risk in the event of prime movements going against your expectations. |
Action | Buy 1 OTM Put, Sell 1 OTM Put (Lower Strike), Buy 1 OTM Call, Sell 1 OTM Call (Higher Strike) | Buy OTM Call Option, Sell ITM Call Option |
Breakeven Point | Upper Breakeven Point = Strike Price of Long Call + Net Premium Paid, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid | Strike Price of Short Call + Net Premium Received |
REVERSE IRON CONDOR Vs BEAR CALL SPREAD - Risk & Reward
REVERSE IRON CONDOR | BEAR CALL SPREAD | |
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Maximum Profit Scenario | Strike Price of Short Call (or Long Put) - Strike Price of Long Call (or Short Put) - Net Premium Paid - Commissions Paid | Max Profit = Net Premium Received - Commissions Paid |
Maximum Loss Scenario | Net Premium Paid + Commissions Paid | Maximum Loss = Long Call Strike Price - Short Call Strike Price - Net Premium Received |
Risk | Limited | Limited |
Reward | Limited | Limited |
REVERSE IRON CONDOR Vs BEAR CALL SPREAD - Strategy Pros & Cons
REVERSE IRON CONDOR | BEAR CALL SPREAD | |
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Similar Strategies | Short Condor | Bear Put Spread, Bull Call Spread |
Disadvantage | • Potential loss is higher than gain. • Limited profit. | • Limited amount of profit. • Margin requirement, more commission charges. |
Advantages | • 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. | • This strategy takes advantage of time decay. • Investors can get profit in a flat market scenario. • Investors can earn options premium income with a lower degree of risk. |