When it comes to Options Trading, there are different complexities involved in terms of choosing a specific strategy that works the best for you.
At the same time, each strategy has its own set of advantages as well as limitations, thus making the concept of options trading even more challenging. Thus, in case you are looking to fit a particular strategy in your option trades, just check few areas before you make a choice.
In this detailed comparison of Bear Call Spread Vs Protective Call options trading strategies, we will be looking at the below-mentioned aspects and more:
- Current Market Position
- Your Risk Appetite
- Your Trading Experience
- Profit Potential
- Intention and Expectation of a trader
- Break-even point of your trade
Apart from the Bear Call Spread Vs Protective Call strategies, there are more than 25 comparisons of each of these strategies with other option strategies. With all these comparisons, you should be able to filter the ones that work the best for you.
Here is the detailed Bear Call Spread Vs Protective Call comparison:
| Comparison Aspect | Protective Call | Bear Call Spread |
| View |  |  |
| Strategy Introduction | A Protective call combines an existing short position on an underlying asset with buying of call options, to safeguard against the price rise against the expectations...more | The bear call spread consists of two calls, both with the same underlying asset and expiration date, but the strike price of the call options bought is less than the strike price of the same number of call options sold. Like most of the spread strategies, it is a limited-risk...more |
| Investor Obligation | Protective call works as a protection against the price reversal and is like an insurance policy | As a thumb rule, the expiration date must be about 30-45 days away in order to be able to take advantage of the accelerating time decay. |
| Market Position | Bearish | Moderately Bearish |
| Strategy Level Suitable for | Intermediates | Intermediates |
| Options Traded | Call | Call |
| Number of Positions | 2 | 2 |
| Action Needed | Short Position on Buy Call Option | Buy OTM Call, Sell OTM Call |
| Risk for You | Limited | Limited |
| Profit Potential | Unlimited | Limited |
| Break Even Point for Investor | Underlying Price - Call Premium | Strike Price of Short Call + Net Premium Received |
| Investor Intention | Protect himself from extra losses if Price goes Up | Let Options Expire Worthlessly |
| Investor Expectation | Market Prices to Go Down | Market to go down gradually, but moderately |
| Strategy Summary | Experience Helps | Limited Risk Limited Profit |
| Advantages | Unlimited Profit, limited Risk | Profit when Market is going down, Limited Risk |
| Disadvantages | Reduced Profits due to the Premium paid for Call Option. | Limited Profit |
| Market Scenarios - Profit | 1 | 2 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | Synthetic Long Put | NA |
| More Comparisons | Protective Call Vs Short Put | Bear Call Spread Vs Short Put |
| Protective Call Vs Long Combo | Bear Call Spread Vs Long Combo | |
| Protective Call Vs Synthetic Call | Bear Call Spread Vs Synthetic Call | |
| Protective Call Vs Long Put | Bear Call Spread Vs Long Put | |
| Protective Call Vs Long Call | Bear Call Spread Vs Long Call | |
| Protective Call Vs Covered Call | Bear Call Spread Vs Covered Call | |
| Protective Call Vs Covered Put | Bear Call Spread Vs Covered Put | |
| Protective Call Vs Short Call | Bear Call Spread Vs Protective Call | |
| Protective Call Vs Short Box | Bear Call Spread Vs Short Box | |
| Protective Call Vs Long Call Condor | Bear Call Spread Vs Long Call Condor | |
| Protective Call Vs Short Call Condor | Bear Call Spread Vs Short Call Condor | |
| Protective Call Vs Box Spread | Bear Call Spread Vs Box Spread | |
| Protective Call Vs Short Strangle | Bear Call Spread Vs Short Strangle | |
| Protective Call Vs Long Strangle | Bear Call Spread Vs Long Strangle | |
| Protective Call Vs Collar Strategy | Bear Call Spread Vs Collar Strategy | |
| Protective Call Vs Long Straddle | Bear Call Spread Vs Long Straddle | |
| Protective Call Vs Short Straddle | Bear Call Spread Vs Short Straddle | |
| Protective Call Vs Long Call Butterfly | Bear Call Spread Vs Long Call Butterfly | |
| Protective Call Vs Short Call Butterfly | Bear Call Spread Vs Short Call Butterfly | |
| Protective Call Vs Bear Call Spread | Bear Call Spread Vs Short Call | |
| Protective Call Vs Bear Put Spread | Bear Call Spread Vs Bear Put Spread | |
| Protective Call Vs Bull Call Spread | Bear Call Spread Vs Bull Call Spread | |
| Protective Call Vs Bull Put Spread | Bear Call Spread Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Bear Call Spread Vs Protective Call option strategies.
At the same time, if you are looking at a bearish market momentum and want to take a limited risk with an eye on unlimited profits, then the protective call is the strategy you must be using.
As the name suggests, if you are looking at a slightly bearish market position and are open for a little risk, then bear call spread is something you can try in your trades. Having said that, the profit you can expect is going to be on a relatively limited level while using this strategy.
This needs to be known that the profit you get using this strategy is also limited in scope.
Furthermore, as told above, it also depends on the market situation.
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