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Ladder Trade


An option trading strategy that involves buying one option and selling two same-type options at sequentially higher strike prices, if calls, or at sequentially lower prices if puts. In other words, this trade combines a bull call spread with an additional higher-strike short call. This strategy aims to benefit from any price movement of the underlying within a particular range, while incurring low premium, if any.

It is also known as a Christmas tree and a table top.



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Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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