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Bull Call Ladder

bullish bullish

Bull Call Ladder is neutral to Bullish Strategy that offers good return but with higher risk. Strategy entails buying 1 ATM and selling two higher strike OTM call at different strike

Legs:3Risk:Unlimited RiskProficiency :Advanced

Example:

InstrumentQtyPrice
BUY NIFTY 06-Oct-26 22400 CE65161.5
SELL NIFTY 06-Oct-26 22450 CE65132.45
SELL NIFTY 06-Oct-26 22500 CE65106.9

When To Execute?

To execute a mildly bullish trade by buying 1 ATM call and selling two OTM Calls to reduce initial outflow.

Trade

Buy 1 lot ITM Call, Sell 1 lot ATM and Sell 1 lot higher OTM

Advantages

•

Bull Call Ladder is best executed in shorter term period to reduce possibility of uncapped risk if the underlying asset rises too much

Disadvantages

•

Time decay is harmful to the position around the buy strike price and becomes advantageous around the highest strike price

Bull Call Ladder
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Maximum Profit

It is a Net debit strategy. Maximum Profit is difference between Middle strike and lower Strike Call less net initial outflow

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Maximum Loss

Maximum Loss is unlimited if the stock moves above highest strike and second break even