Bull Call Spread Strategy

F&O
1

In Bull Call Spread Strategy, what is a better strategy - sell at near OTM 34200 or far 34600?

2

Choosing a Bull call spread indicates that you are bullish. The choice of OTM or Far should depend on how strong your conviction is on bullishness. Near OTM is always better than Far OTM. Far OTM will again be similar to the naked option buying.

You can understand better by creating different scenarios of expiry

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3

For a bull call spread, one needs to Hedge their buy call by selling an OTM or deep OTM call option. Each of them have their on advantages and disadvantages:

  1. For selling OTM CE:
    :fist_right: expensive premiums
    :fist_right: lower reward to risk ratio
    :fist_right: higher probability of profit
  2. For selling deep OTM CE:
    :fist_right: cheap premiums
    :fist_right: higher reward to risk ratio
    :fist_right: lower probability of profit

Based on your TA and FA of the underlying security you can choose whichever suits your perspective.

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