Call Christmas Tree option strategy
Call Christmas Tree buys one ATM Call, skips a strike, sells three OTM Calls and buys two further OTM Calls. It is a cheap, butterfly-like bet that the underlying rises to the sold strike.
Payoff at expiry
Nifty, lot size 65 · Nifty future 22,946 · 19 Oct 2026Legs
| Action | Option | Strike | Lots | Qty | Premium |
|---|---|---|---|---|---|
| BUY | ATM Call | 22,950 | 1 | 65 | ₹102.02 |
| SELL | OTM Call | 23,050 | 3 | 195 | ₹60.38 |
| BUY | OTM Call | 23,100 | 2 | 130 | ₹44.92 |
How it works
- Buy 1 ATM call at the 22,950 strike for ₹102.02, paying the premium.
- Sell 3 OTM calls at the 23,050 strike for ₹60.38 each, collecting the premium.
- Buy 2 OTM calls at the 23,100 strike for ₹44.92 each, paying the premium.
- You pay a net ₹697 upfront for the position. This is the most you can lose.
Below 22,959 you lose, up to ₹697.
Between 22,959 and 23,099 you profit, up to ₹5,012.
Above 23,099 you lose, up to ₹697.
Set-up: Buy 1 lot ATM Call, Sell 3 lots OTM Calls two strikes higher and Buy 2 lots OTM Calls one strike above those.
What happens if Nifty moves
Profit or loss at expiry| Nifty at expiry | Move | Profit / loss |
|---|---|---|
| 21,550 | −6% | −₹697 |
| 22,250 | −3% | −₹697 |
| 22,700 | −1% | −₹697 |
| 22,950 | Unchanged | −₹697 |
| 23,200 | +1% | −₹697 |
| 23,650 | +3% | −₹697 |
| 24,300 | +6% | −₹697 |
How the Greeks affect it
When to use
When you are moderately bullish with a specific target and want a lower cost than a regular butterfly.
- Lower cost than a butterfly for a similar target.
- Risk is defined upfront.
- Skipped strike gives room for the move to develop.
Things to watch
- Profit zone is narrow.
- Six contracts across three strikes.
- Needs the underlying to reach the target by expiry.
Call Christmas Tree: questions
What is a Call Christmas Tree strategy?
Call Christmas Tree buys one ATM Call, skips a strike, sells three OTM Calls and buys two further OTM Calls. It is a cheap, butterfly-like bet that the underlying rises to the sold strike.
When should you use a Call Christmas Tree?
When you are moderately bullish with a specific target and want a lower cost than a regular butterfly.
How do you set up a Call Christmas Tree?
Buy 1 lot ATM Call, Sell 3 lots OTM Calls two strikes higher and Buy 2 lots OTM Calls one strike above those.
What is the maximum profit of a Call Christmas Tree?
Limited, earned if the underlying closes at the sold strike at expiry.
What is the maximum loss of a Call Christmas Tree?
Limited to the net debit paid, if the underlying stays below the lowest strike or rises well above the highest strike.
What is the breakeven of a Call Christmas Tree?
With Nifty at 22,946, the example on this page breaks even at 22,959 and 23,099 at expiry.