Title:
Comparing the Effectiveness of Christmas Tree and Condor Spreads for Hedging LSTR Stock

Authors:
Donny Citra Lesmana*, Abrar Fauzi Riyanta, Citra Dewi, Naila Sakhsiya Akmalia, Akbar Aulia Ahsanu Kamil, Indonesia

Abstract:

Option trading strategies are crucial instruments for portfolio optimization, particularly in the context of the increasing complexity of financial markets. While most existing studies have focused on the effectiveness of these strategies under high-volatility conditions, this study seeks to address a gap by examining the performance of the Christmas tree and condor spread strategies as hedging tools in a low-volatility environment, using Landstar System Inc. (LSTR) as a case study. The Black-Scholes Merton model is employed to price the options, utilizing daily stock price data. The results indicate that the Christmas tree strategy provides higher profit potential in stable market conditions, while the condor strategy proves more appropriate for investors seeking value protection and stability. These findings offer significant insights for investors looking to enhance their decision-making and risk management practices amidst market fluctuations.

DOI: https://doi.org/10.51505/IJEBMR.2025.91017