Ladders

Call Ladder

A long call ladder consists of buying a call at one strike and selling 2 calls at each of two higher strikes.

User earns premium to enter the trade but posts collateral; ( collateral requirement can get mitigated by entering into a long farther out of the money call option; a call condor ).

Put Ladder

A long put ladder consists of buying a put at one strike and selling 2 put at each of two lower strikes.

User earns premium to enter the trade but posts collateral; ( collateral requirement can get mitigated by entering into a long farther out of the money put option; a put condor ).