Comparision (LONG CALL CONDOR SPREAD
VS SHORT STRADDLE)
Compare Strategies
LONG CALL CONDOR SPREAD
SHORT STRADDLE
About Strategy
Long Call Condor Spread Option Strategy
This strategy is implemented when a trader is bearish on the volatility and expects the market to move sideways. Using Call Options of the same expiry date, he will buy one Deep ITM Call Option, sell 1 ITM Call Option, sell 1 OTM Call Option, buy 1 Deep OTM Call Option. The risk and reward both are limited due to offsetting of long and short positions. For t
This strategy is just the opposite of Long Straddle. A trader should adopt this strategy when he expects less volatility in the near future. Here, a trader will sell one Call Option & one Put Option of the same strike price, same expiry date and of the same underlying asset. If the stock/index hovers around the same levels then both the options will expire worthless an ..
LONG CALL CONDOR SPREAD Vs SHORT STRADDLE - Details
LONG CALL CONDOR SPREAD
SHORT STRADDLE
Market View
Neutral
Neutral
Type (CE/PE)
CE (Call Option)
CE (Call Option) + PE (Put Option)
Number Of Positions
4
2
Strategy Level
Advance
Advance
Reward Profile
Limited
Limited
Risk Profile
Limited
Unlimited
Breakeven Point
Lower Breakeven = Lower Strike Price + Net Premium Upper breakeven = Higher Strike Price - Net Premium
Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call+ Net Premium
LONG CALL CONDOR SPREAD Vs SHORT STRADDLE - When & How to use ?
LONG CALL CONDOR SPREAD
SHORT STRADDLE
Market View
Neutral
Neutral
When to use?
This strategy works well when you expect the price of the underlying asset to be range bound in the coming days.
This strategy is work well when an investor expect a flat market in the coming days with very less movement in the prices of underlying asset.
Action
Buy Deep ITM Call Option, Buy Deep OTM Call Option, Sell ITM Call Option, Sell OTM Call Option
Sell Call Option, Sell Put Option
Breakeven Point
Lower Breakeven = Lower Strike Price + Net Premium Upper breakeven = Higher Strike Price - Net Premium
Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call+ Net Premium
LONG CALL CONDOR SPREAD Vs SHORT STRADDLE - Risk & Reward
LONG CALL CONDOR SPREAD
SHORT STRADDLE
Maximum Profit Scenario
Strike Price of Lower Strike Short Call - Strike Price of Lower Strike Long Call - Net Premium Paid
Max Profit = Net Premium Received - Commissions Paid
Maximum Loss Scenario
Net Premium Paid
Maximum Loss = Long Call Strike Price - Short Call Strike Price - Net Premium Received
Risk
Limited
Unlimited
Reward
Limited
Limited
LONG CALL CONDOR SPREAD Vs SHORT STRADDLE - Strategy Pros & Cons
LONG CALL CONDOR SPREAD
SHORT STRADDLE
Similar Strategies
Long Put Butterfly, Short Call Condor, Short Strangle
Short Strangle
Disadvantage
• Amount of profit is comparatively low. • As this strategy has 4 legs so the brokerage cost is higher that will affect your profit.
• Unlimited risk. • If the price of the underlying asset moves in either direction then huge losses can occur.
Advantages
• Capable to generate profit even if there is low volatility in the market. • This strategy is associated with limited risk and limited profit. • Wider profit zone.
• A trader can earn profit even when there is no volatility in the market . • Allows you to benefit from double time decay. • Trader can collect premium from puts and calls option .