Compare Strategies
LONG COMBO | REVERSE IRON CONDOR | |
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About Strategy |
Long Combo Option StrategyLong Combo Option Trading Strategy is implemented when a trader is bullish in nature and expects the stock price to rise in the near future. Here a trader will sell one ‘Out of the Money’ Put Option and buy one ‘Out of the Money’ Call Option. This trade will require less capital to implement since the amount required to buy the call will be covered by the amount received |
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 .. |
LONG COMBO Vs REVERSE IRON CONDOR - Details
LONG COMBO | REVERSE IRON CONDOR | |
---|---|---|
Market View | Bullish | Neutral |
Type (CE/PE) | CE (Call Option) + PE (Put Option) | CE (Call Option) + PE (Put Option) |
Number Of Positions | 2 | 4 |
Strategy Level | Advance | Advance |
Reward Profile | Unlimited | Limited |
Risk Profile | Unlimited | Limited |
Breakeven Point | Call Strike + Net Premium | Upper Breakeven Point = Strike Price of Long Call + Net Premium Paid, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid |
LONG COMBO Vs REVERSE IRON CONDOR - When & How to use ?
LONG COMBO | REVERSE IRON CONDOR | |
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Market View | Bullish | Neutral |
When to use? | This strategy is used when an investor Bullish on an underlying but don't have the required capital or the risk appetite to invest directly into it. | 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 |
Action | Sell OTM Put Option, Buy OTM Call Option | Buy 1 OTM Put, Sell 1 OTM Put (Lower Strike), Buy 1 OTM Call, Sell 1 OTM Call (Higher Strike) |
Breakeven Point | Call Strike + Net Premium | Upper Breakeven Point = Strike Price of Long Call + Net Premium Paid, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid |
LONG COMBO Vs REVERSE IRON CONDOR - Risk & Reward
LONG COMBO | REVERSE IRON CONDOR | |
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Maximum Profit Scenario | Underlying asset goes up and Call option exercised | Strike Price of Short Call (or Long Put) - Strike Price of Long Call (or Short Put) - Net Premium Paid - Commissions Paid |
Maximum Loss Scenario | Underlying asset goes down and Put option exercised | Net Premium Paid + Commissions Paid |
Risk | Unlimited | Limited |
Reward | Unlimited | Limited |
LONG COMBO Vs REVERSE IRON CONDOR - Strategy Pros & Cons
LONG COMBO | REVERSE IRON CONDOR | |
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Similar Strategies | - | Short Condor |
Disadvantage | • Losses can keep on increasing as the price of stock goes down. • High risk strategy. | • Potential loss is higher than gain. • Limited profit. |
Advantages | • Capital investment is low and returns are high. • Unlimited reward, returns keep on increasing with the increase on stock price. • Leverage facility provided by this strategy is very beneficial. | • 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. |