Day Trading Stocks & Futures

Romeo1998

Well-Known Member
In a Bear Call spread,
What happens when the strike prices are near to each other?
Ii.e.
say CMP 16000
Bearish outlook
Sell 16000 CE
Buy 16050 CE
Please share your views.
Very nice question :pompus: i has very limited knowledge of option, but i tries to answer :pompus: for bear call spread, as person is expecting market to fall or remain sideways, they usually short the ATM or ITM call n buy the OTM call.... :pompus:
as u is buying n shorting OTM calls, this combination a bit different :pompus:
option startagies is limited to person's creativity :pompus::DD:DD:DD so all combination is nice as long as it make profit :pompus:
using friday prices, this is output.... very close strikes will give small profit n risk reward also not favourable :pompus:
as u have shorted 16000CE, means u is expecting market to expire below 16000 :pompus:
here 16011 is breakeven point, at 16000 and below u get 11 points profit :pompus:
1656206648893.png


using 15700 and 16050 is what most people do for bear call spread, now R:R also less risky than earlier, here 15827 is breakeven point, as long as expiry below it, there is profit :pompus:
1656208015358.png


as u want to use very close strike price, as spot is at 15700, using 15700 and 15750 give favourable R:R :pompus: but now breakeven is 15727 :pompus:
1656208185625.png



if someone asks me what i dids in this scenario, i is simply opens bull call spread, as i expects market to fly till 16000 n once it reach 16000, i close positions or opens new positions and locks in porfits :pompus::DD:DD:DD i thinks u must not uses bear call spread :pompus: or u must uses bear call spread when market at 16000 :pompus:
all this just my suggestion, please trading only after testing proper :pompus:
qoobee-shake-hand-emoticon.gif
 

mohan.sic

Well-Known Member
In a Bear Call spread,
What happens when the strike prices are near to each other?
Ii.e.
say CMP 16000
Bearish outlook
Sell 16000 CE
Buy 16050 CE
Please share your views.
Strikes prices will give your risk/reward. As per your example, it will be 1:1 RR, that is you either get 25 rs for a expiry below 16000 or lose 25rs for close above 16050.
 
if someone asks me what i dids in this scenario, i is simply opens bull call spread, as i expects market to fly till 16000 n once it reach 16000, i close positions or opens new positions and locks in porfits :pompus::DD:DD:DD i thinks u must not uses bear call spread :pompus: or u must uses bear call spread when market at 16000 :pompus:
all this just my suggestion, please trading only after testing proper :pompus:
Aree wah! This is like jodi made in heaven... he wants to sell the spread you want yo buy the spread... idhar hi kar lo dabba trading... (you can give me commission for the money saving idea)
 

mohan.sic

Well-Known Member
Very nice question :pompus: i has very limited knowledge of option, but i tries to answer :pompus: for bear call spread, as person is expecting market to fall or remain sideways, they usually short the ATM or ITM call n buy the OTM call.... :pompus:
as u is buying n shorting OTM calls, this combination a bit different :pompus:
option startagies is limited to person's creativity :pompus::DD:DD:DD so all combination is nice as long as it make profit :pompus:
using friday prices, this is output.... very close strikes will give small profit n risk reward also not favourable :pompus:
as u have shorted 16000CE, means u is expecting market to expire below 16000 :pompus:
here 16011 is breakeven point, at 16000 and below u get 11 points profit :pompus:
View attachment 47892

using 15700 and 16050 is what most people do for bear call spread, now R:R also less risky than earlier, here 15827 is breakeven point, as long as expiry below it, there is profit :pompus:
View attachment 47893

as u want to use very close strike price, as spot is at 15700, using 15700 and 15750 give favourable R:R :pompus: but now breakeven is 15727 :pompus:
View attachment 47894


if someone asks me what i dids in this scenario, i is simply opens bull call spread, as i expects market to fly till 16000 n once it reach 16000, i close positions or opens new positions and locks in porfits :pompus::DD:DD:DD i thinks u must not uses bear call spread :pompus: or u must uses bear call spread when market at 16000 :pompus:
all this just my suggestion, please trading only after testing proper :pompus:
View attachment 47895

all perfect...just it seems you overlooked a point in this query ..

"say CMP 16000
Bearish outlook
Sell 16000 CE
Buy 16050 CE
Please share your views. "

so the above query is not on an otm spread..it is on atm strikes spread and the result should be your view on 15700-750 strike.
 

Romeo1998

Well-Known Member
all perfect...just it seems you overlooked a point in this query ..

"say CMP 16000
Bearish outlook
Sell 16000 CE
Buy 16050 CE
Please share your views. "

so the above query is not on an otm spread..it is on atm strikes spread and the result should be your view on 15700-750 strike.
yes, i see that later on :pompus::DD:DD:DD
this my childhood habit of making silly mistakes :pompus::DD:DD:DD
when i in 5th standard, in maths i get 99/100, because i solve all complex problems, but 1st question was fill in the blanks n i write wrong answer, question was 9999+1 = _____ n i write 100000 in a hurry , n get 99 n not 100 :pompus::DD:DD:DD that was the only year i get 99 in maths :pompus::DD:DD:DD after that i just passing in all subjects n not interest study n whole day just playing :pompus::DD:DD:DD
 

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