Option Strategy- Bear Call Ladder

Bull Call Spread

Market View:

Very Bullish and Maket will move either direction

Implementation:

Sell 1 ITM Call options, Buy 1 ATM Call option and Buy 1 OTM Call option

  • Sell 1 ITM Call option (Leg 1- LS High premium)
  • Buy 1 ATM Call option (leg 2 - MS Mid Premium)
  • Buy 1 OTM Call option (leg 3 - HS Low Premium)

Key trigger points:

  • Spread(Ladder) = Difference between MS and LS
  • Net Credit = Premium Received for ITM LS – Premium paid for (MS Mid Premium + HS Low Premium)
  • Max Profit(when market is down) = Net Credit(at or below LS)
  • Max Profit(when market is up) = Unlimited
  • Max Loss = Spread – Net Credit (occurs beteen MS(ATM) and HS(OTM)
  • Lower Breakeven = Lower Strike + Net Credit OR Middle Strike - Max Loss
  • Upper Breakeven = (HS + MS ) - LS - NC OR Higher Strike + Max Loss

Calculation for Bear Call Ladder

  • Spread =
  • Net Credit =
  • Max Profit(when market is down) =
  • Max Profit (when market is up) = Unlimited
  • Max Loss =
  • Lower Breakeven =
  • Upper Breakeven =
  • Lower Profit : Max Loss =
Calculation for lots
  • Total Net Credit =
  • Total Profit when market is down =
  • Total Profit when market is up = Unlimited
  • Total Max Loss =