Comparision (DIAGONAL BEAR PUT SPREAD
VS IRON CONDORS)
Compare Strategies
DIAGONAL BEAR PUT SPREAD
IRON CONDORS
About Strategy
Diagonal Bear Put Spread
When the trader is neutral – bearish in the near-month and bearish in the mid-month, he will apply Diagonal Bear Put Spread. This strategy involves buying Mid-Month ITM Put Options and selling (short/write) equal number of Near-Month OTM Put Options, of the same underlying asset. This strategy bags limited rewards with limited risk.
Iron Condor is a neutral trading strategy. A trader tries to make profit from low volatility in the price of the underlying asset. This strategy will be better understood if you recall ‘Bull Put Spread’ & ‘Bear Call Spread’. A trader will buy one Deep OTM Put Option and sell one OTM Put Option,. He will also sell one OTM Call Option and buy one Deep OTM Call Option. ..
DIAGONAL BEAR PUT SPREAD Vs IRON CONDORS - Details
DIAGONAL BEAR PUT SPREAD
IRON CONDORS
Market View
Bearish
Neutral
Type (CE/PE)
PE (Put Option)
CE (Call Option) + PE (Put Option)
Number Of Positions
2
4
Strategy Level
Beginners
Advance
Reward Profile
Limited
Limited
Risk Profile
Limited
Limited
Breakeven Point
This is a dynamic trade with many possible scenarios and future trades, it is impossible to calculate a breakeven.
Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received
DIAGONAL BEAR PUT SPREAD Vs IRON CONDORS - When & How to use ?
DIAGONAL BEAR PUT SPREAD
IRON CONDORS
Market View
Bearish
Neutral
When to use?
When the trader is neutral – bearish in the near-month and bearish in the mid-month, he will apply Diagonal Bear Put Spread. This strategy involves buying Mid-Month ITM Put Options and selling (short/write) equal number of Near-Month OTM Put Options, of the same underlying asset
When a trader tries to make profit from low volatility in the price of the underlying asset.
Action
Sell 1 Near-Month OTM Put Option, Buy 1 Mid-Month ITM Put Option
