Bull Call Spread Vs Covered Strangle Options Trading Platform Comparison

Compare Trading Platform Bull Call Spread and Covered Strangle. Find similarities and differences between Bull Call Spread and Covered Strangle Trading Softwares. Find the most powerful trading platform. Find which trading software is better among Bull Call Spread and Covered Strangle.

Bull Call Spread Vs Covered Strangle

	Bull Call Spread	Covered Strangle


About Strategy	A Bull Call Spread (or Bull Call Debit Spread) strategy is meant for investors who are moderately bullish of the market and are expecting mild rise in the price of underlying. The strategy involves taking two positions of buying a Call Option and selling of a Call Option. The risk and reward in this strategy is limited. A Bull Call Spread strategy involves Buy ITM Call Option and Sell OTM Call Option.For example, if you are of the view that NIFTY will rise moderately in near future then you can Buy NIFTY Call Option at ITM and Sell Nifty Call Option at OTM. You will earn massively when both of your Options are exercised and incur huge losses when both Options are not exercised. Read More	The covered strangle option strategy is a bullish strategy. The strategy is created by owning or buying a stock and selling an OTM Call and OTM Put. It is called covered strangle because the upside risk of the strangle is covered or minimized. The strategy is perfect to use when you are prepared to sell the holding or bought shares at a higher price if the market moves up but would also is ready to buy more shares if the market moves downwards. The profit and in this strategy is unlimited while the risk is only on the downside. Read More
Market View	Bullish	Bullish
Strategy Level	Beginners	Advance
Options Type	Call	Call + Put + Underlying
Number of Positions	2	3
Risk Profile	Limited	Limited
Reward Profile	Limited	Limited
Breakeven Point	Strike price of purchased call + net premium paid	two break-even points

When and how to use Bull Call Spread and Covered Strangle?

	Bull Call Spread	Covered Strangle
When to use?	A Bull Call Spread strategy works well when you're Bullish of the market but expect the underlying to gain mildly in near future.	A covered strangle strategy can be used when you are bullish on the market but also want to cover any downside risk. You are prepared to sell the shares on profit but are also willing to buy more shares in case the prices fall.
Market View	Bullish When you are expecting a moderate rise in the price of the underlying.	Bullish The Strategy is perfect to apply when you're bullish on the market and expecting less volatility in the market.
Action	Buy ITM Call Option Sell OTM Call Option A Bull Call Spread strategy involves Buy ITM Call Option + Sell OTM Call Option. For example, if you are of the view that Nifty will rise moderately in near future then you can Buy NIFTY Call Option at ITM and Sell NIFTY 50 Call Option at OTM. You will earn massively when both of your Options are exercised and incur huge losses when both Options are not exercised.	Buy 100 shares + Sell OTM Call +Sell OTM Put The covered strangle options strategy can be executed by buying 100 shares of a stock while simultaneously selling an OTM Put and Call of the same the stock and similar expiration date.
Breakeven Point	Strike price of purchased call + net premium paid	two break-even points There are 2 break-even points in the covered strangle strategy. One is the Upper break even point which is the sum of strike price of the Call option and premium received while the other is the lower break-even point which is the difference strike price of short Put and premium received.

Compare Risks and Rewards (Bull Call Spread Vs Covered Strangle)

	Bull Call Spread	Covered Strangle
Risks	Limited The trade will result in a loss if the price of the underlying decreases at expiration. The maximum loss is limited to net premium paid. Max Loss = Net Premium Paid Max Loss happens when the strike price of Call is less than or equal to price of the underlying.	Limited The risk on this strategy is only on the downside when the price moves below the strike price of the Put option.
Rewards	Limited Limited To The Difference Between Two Strike Prices Minus Net Premium Maximum profit happens when the price of the underlying rises above strike price of two Calls. The profit is limited to the difference between two strike prices minus net premium paid. Max Profit = (Strike Price of Call 1 - Strike Price of Call 2) - Net Premium Paid	Limited The maximum profit on this strategy happens when the stock price is above the call price on expiry. The profit is the total of the gain from buying/selling stocks and net premium received on selling options.
Maximum Profit Scenario	Both options exercised	You will earn the maximum profit when the price of the stock is above the Call option strike price on expiry. You will be assigned on the Call option, would be able to sell holding shares on profit while retaining the premiums received while selling the options.
Maximum Loss Scenario	Both options unexercised	The maximum loss would be when the stock price falls drastically and turns worthless. The premiums received while selling the options will compensate for some of the loss.

Pros & Cons or Bull Call Spread and Covered Strangle

	Bull Call Spread	Covered Strangle
Advantages	Instead of straightaway buying a Call Option, this strategy allows you to reduce cost and risk of your investments.	As the strategy involves buying shares when prices fall, there is long-term gain even if their short-term loss. There is no upside risk due to the long position in stocks. Allows you to earn income in a moderately bullish market.
Disadvantage	Profit potential is limited.	The substantial risk when the price moves downwards. Risk of assignments.
Simillar Strategies	Collar, Bull Put Spread	Long Strangle, Short Strangle

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