Option Trading

Bull Call Spread (Controlled Bullish Strategy)

Best for: Beginners expecting moderate rise in stock.

Market Outlook: Moderately bullish.

How it works:

Buy a lower strike call.

Sell a higher strike call.

Example:

Nifty at 22,000.

Buy 22,000 call at ₹150.

Sell 22,200 call at ₹80.

Net cost = ₹70.
If Nifty rises to 22,200, max profit = ₹130 (₹200 – ₹70).
Max loss = ₹70 (if Nifty stays below 22,000).

✅ Pros: Limited risk, limited reward.
❌ Cons: Not suitable if stock rises sharply.

Bear Put Spread (Controlled Bearish Strategy)

Best for: Beginners expecting moderate fall in stock.

Market Outlook: Moderately bearish.

How it works:

Buy a higher strike put.

Sell a lower strike put.

Example:

Nifty at 22,000.

Buy 22,000 put at ₹160.

Sell 21,800 put at ₹90.

Net cost = ₹70.
If Nifty falls to 21,800, max profit = ₹130.
Max loss = ₹70.

✅ Pros: Controlled loss, cheaper than naked put.
❌ Cons: Profit capped.