Compare Strategies
BEAR CALL SPREAD | SHORT PUT LADDER | |
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About Strategy |
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 |
Short Put Ladder Option StrategyThis strategy is implemented when a trader is slightly bearish on the market. A trader is required to be bullish over the volatility in the market. It involves sale of an ITM Put Option and buying of 1 ATM & 1 OTM Put Options. However, the risk associated with this strategy is limited.
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BEAR CALL SPREAD Vs SHORT PUT LADDER - Details
BEAR CALL SPREAD | SHORT PUT LADDER | |
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Market View | Bearish | Neutral |
Type (CE/PE) | CE (Call Option) | PE (Put Option) |
Number Of Positions | 2 | 3 |
Strategy Level | Beginners | Advance |
Reward Profile | Limited | Unlimited |
Risk Profile | Limited | Limited |
Breakeven Point | Strike Price of Short Call + Net Premium Received | Upper Breakeven Point = Strike Price of Short Put - Net Premium Received Lower Breakeven Point = Total Strike Prices of Long Puts - Strike Price of Short Put + Net Premium Received |
BEAR CALL SPREAD Vs SHORT PUT LADDER - When & How to use ?
BEAR CALL SPREAD | SHORT PUT LADDER | |
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Market View | Bearish | Neutral |
When to use? | 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. | This strategy is implemented when a trader is slightly bearish on the market. |
Action | Buy OTM Call Option, Sell ITM Call Option | Sell ITM Put Option, Buying 1 ATM & 1 OTM Put Option. |
Breakeven Point | Strike Price of Short Call + Net Premium Received | Upper Breakeven Point = Strike Price of Short Put - Net Premium Received Lower Breakeven Point = Total Strike Prices of Long Puts - Strike Price of Short Put + Net Premium Received |
BEAR CALL SPREAD Vs SHORT PUT LADDER - Risk & Reward
BEAR CALL SPREAD | SHORT PUT LADDER | |
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Maximum Profit Scenario | Max Profit = Net Premium Received - Commissions Paid | When Price of Underlying < Total Strike Prices of Long Puts - Strike Price of Short Put + Net Premium Received |
Maximum Loss Scenario | Maximum Loss = Long Call Strike Price - Short Call Strike Price - Net Premium Received | Strike Price of Short Put - Strike Price of Higher Strike Long Put - Net Premium Received + Commissions Paid |
Risk | Limited | Limited |
Reward | Limited | Unlimited |
BEAR CALL SPREAD Vs SHORT PUT LADDER - Strategy Pros & Cons
BEAR CALL SPREAD | SHORT PUT LADDER | |
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Similar Strategies | Bear Put Spread, Bull Call Spread | Strap, Strip |
Disadvantage | • Limited amount of profit. • Margin requirement, more commission charges. | • Best to use when you are confident about movement of market. • Small margin required. |
Advantages | • 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. | • When there is surge in implied volatility, this strategy can give more profit. • Unlimited downside profit. • Limited risk and unlimited reward strategy. |