Kite is an original, experimental bullish structure: a long call — the upside kite — financed by a bull put credit spread below it, the tail. The put spread pays for the call, so you often open it for a net credit while keeping unlimited upside and a defined, capped downside.
Open the Kite calculator →Kite is an experimental, non-textbook structure. Use it when you are bullish and want cheap upside leverage, but you also want your downside capped rather than open-ended like a naked short put.
It suits names you are happy to be bullish on into a catalyst: the put spread funds the call, so a rally pays off strongly while a mild drop only costs the defined put-spread risk.
Above the call strike the long call runs with unlimited upside. If the stock stays between the strikes, the options expire and you keep any net credit.
Below the short put the loss grows, but only down to the long put, where it is capped. The maximum loss is the put-spread width minus the net credit (or plus the net debit if you paid one).
Use the free OptionProfit Kite calculator to load a live option chain, build the trade, and instantly see the payoff chart, breakevens, probability of profit, Greeks and a Monte Carlo simulation of outcomes.
It is an original, experimental structure we built for exploration, but it is made of standard legs — a long call and a bull put spread — so it is a valid defined-risk bullish trade. It is a cousin of the risk reversal.
The downside is capped by the long put: your maximum loss is the put-spread width minus any net credit collected. Unlike a naked short put, the loss cannot run away.
A net credit means a flat or rising stock is already profitable, and the long call gives you free upside leverage on top — the put spread is effectively paying for your call.
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