Compare Strategies
LONG CALL LADDER | BEAR PUT SPREAD | |
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About Strategy |
Long Call Ladder Option StrategyLong Call Ladder Strategy is an extension to Bull Call Spread Strategy. A trader will be slightly bullish about the market, in this strategy but bearish over volatility. It involves buying of an ITM Call Option and sale of 1 ATM & 1 OTM Call Options. However, the risk associated with this strategy is unlimited and reward is limited. |
Bear Put Spread Option StrategyWhen a trader is moderately bearish on the market he can implement this strategy. Bear-Put-Spread involves buying of ITM Put Option and selling of an OTM Put Option. If prices fall, the ITM Put option starts making profits and the OTM Put option also adds to profit at a certain extent if the expiry price stays above the OTM strike. However, if it falls below the OTM .. |
LONG CALL LADDER Vs BEAR PUT SPREAD - Details
LONG CALL LADDER | BEAR PUT SPREAD | |
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Market View | Neutral | Bearish |
Type (CE/PE) | CE (Call Option) | PE (Put Option) |
Number Of Positions | 3 | 2 |
Strategy Level | Advance | Advance |
Reward Profile | Unlimited | Limited |
Risk Profile | Unlimited | Limited |
Breakeven Point | Upper Breakeven Point = Total Strike Prices of Short Calls - Strike Price of Long Call - Net Premium Paid, Lower Breakeven Point = Strike Price of Long Call + Net Premium Paid | Strike Price of Long Put - Net Premium |
LONG CALL LADDER Vs BEAR PUT SPREAD - When & How to use ?
LONG CALL LADDER | BEAR PUT SPREAD | |
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Market View | Neutral | Bearish |
When to use? | This Strategy is an extension to Bull Call Spread Strategy. A trader will be slightly bullish about the market, in this strategy but bearish over volatility. | The bear call spread options 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 ITM Call, Sell 1 ATM Call, Sell 1 OTM Call | Buy ITM Put Option, Sell OTM Put Option |
Breakeven Point | Upper Breakeven Point = Total Strike Prices of Short Calls - Strike Price of Long Call - Net Premium Paid, Lower Breakeven Point = Strike Price of Long Call + Net Premium Paid | Strike Price of Long Put - Net Premium |
LONG CALL LADDER Vs BEAR PUT SPREAD - Risk & Reward
LONG CALL LADDER | BEAR PUT SPREAD | |
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Maximum Profit Scenario | Strike Price of Lower Strike Short Call - Strike Price of Long Call - Net Premium Paid - Commissions Paid | Max Profit = Strike Price of Long Put - Strike Price of Short Put - Net Premium Paid. |
Maximum Loss Scenario | Price of Underlying - Upper Breakeven Price + Commissions Paid | Max Loss = Net Premium Paid. |
Risk | Unlimited | Limited |
Reward | Unlimited | Limited |
LONG CALL LADDER Vs BEAR PUT SPREAD - Strategy Pros & Cons
LONG CALL LADDER | BEAR PUT SPREAD | |
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Similar Strategies | Short Strangle (Sell Strangle), Short Straddle (Sell Straddle) | Bear Call Spread, Bull Call Spread |
Disadvantage | • Unlimited risk. • Margin required. | • Limited profit. • Early assignment risk. |
Advantages | • Reduces capital outlay of bull call spread. • Wider maximum profit zone. • When there is decrease in implied volatility, this strategy can give profit. | • If the strike price, expiration date or underlying stocks are rightly chosen then risk of losses would be limited to the net premium paid. • This strategy works well in declining markets. • Limited risk. |