Long Call Ladder

Long Call Ladder is a strategy that must be devised when the investor is moderately bullish on the market direction and expects volatility to be less in the market.

A Long Call Ladder strategy is formed by buying “In-the-Money Call Option”, selling one “At-the-Money Call Option” and one “Out-of-the-Money Call Option”.

A Long Call Ladder is an extension of Bull Call Spread.

The investor will benefit if the underlying Stock/ Index remains between strike prices of the Call options.

Investor view: Neutral on direction and bearish on Stock/ Index volatility.

Risk: Unlimited.

Reward: Limited.Breakeven: Total strike prices of Short Calls – strike price of Long Call +/– net premium received

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