STOCK BROKER REVIEW | INVESTING | UPCOMING IPO | ALGO TRADING | TECHNICAL ANALYSIS

Comparision (CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY VS SHORT PUT)

 

Compare Strategies

  CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY SHORT PUT
About Strategy

Christmas Tree Spread with Call Option Strategy

This 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 Put Option Strategy

A trader will short put if he is bullish in nature and expects the underlying asset not to fall below a certain level.
Risk: Losses will be potentially unlimited if the stock skyrockets above the strike price of put.

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs SHORT PUT - Details

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY SHORT PUT
Market View Bullish Bullish
Type (CE/PE) CE (Call Option) PE (Put Option)
Number Of Positions 4 1
Strategy Level Advance Beginners
Reward Profile Limited Limited
Risk Profile Limited Unlimited
Breakeven Point Lowest strike prices + premium paid – the half premium. Strike Price - Premium

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs SHORT PUT - When & How to use ?

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY SHORT PUT
Market View Bullish Bullish
When to use? This Strategy is used when an investor wants potential returns. This strategy works well when you're Bullish that the price of the underlying will not fall beyond a certain level.
Action • Buy 1 call , • Sell 3 calls, • Buy 2 calls Sell Put Option
Breakeven Point Lowest strike prices + premium paid – the half premium. Strike Price - Premium

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs SHORT PUT - Risk & Reward

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY SHORT PUT
Maximum Profit Scenario Equal middle strike price – lower strike price – the premium Premium received in your account when you sell the Put Option.
Maximum Loss Scenario Net Debit paid for the strategy. Unlimited (When the price of the underlying falls.)
Risk Limited Unlimited
Reward Limited Limited

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY Vs SHORT PUT - Strategy Pros & Cons

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY SHORT PUT
Similar Strategies CHRISTMAS TREE SPREAD WITH PUT OPTION Bull Put Spread, Short Starddle
Disadvantage • Potential profit is lower or limited. • Unlimited risk. • Huge losses if the price of the underlying stock falls steeply.
Advantages • The potential of loss is limited. • Benefit from time decay. • Less capital required than buying the stock outright. • Profit when underlying stock price rise, move sideways or drop by a relatively small account.

CHRISTMAS TREE SPREAD WITH CALL OPTION STRATEGY

SHORT PUT