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 Short Call Butterfly 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 Short Call Butterfly 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 Short Call Butterfly comparison:
| Comparison Aspect | Bear Call Spread | Short Call Butterfly |
| View |  |  |
| Strategy Introduction | 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 | Short Call Butterfly is the options strategy which is used when the trader expects a lot of volatility in the market. It is the opposite of the long call butterfly, in which the investor expects...more |
| Investor Obligation | 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. | It is necessary that the strike prices of the in-the-money and out-of-the-money call options are equidistant from the at-the-money call options, and all the options have the same expiration date. |
| Market Position | Moderately Bearish | Neutral |
| Strategy Level Suitable for | Intermediates | Intermediates |
| Options Traded | Call | Call |
| Number of Positions | 2 | 4 |
| Action Needed | Buy OTM Call, Sell OTM Call | 2 ATM, 1 ITM, 1 OTM Calls |
| Risk for You | Limited | Limited |
| Profit Potential | Limited | Limited |
| Break Even Point for Investor | Strike Price of Short Call + Net Premium Received | Lower Break-even = Lower Strike Price + Net Premium Upper Break-even = Higher Strike Price - Net Premium |
| Investor Intention | Let Options Expire Worthlessly | Let Options Expire Worthlessly |
| Investor Expectation | Market to go down gradually, but moderately | High Market Volatility |
| Strategy Summary | Limited Risk Limited Profit | Profit in Unsure Market Situations |
| Advantages | Profit when Market is going down, Limited Risk | Limited Exposure, Low Investment |
| Disadvantages | Limited Profit | Low Returns, Requires Significant Market Movement |
| Market Scenarios - Profit | 2 | 1 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | NA | NA |
| More Comparisons | Bear Call Spread Vs Short Put | Short Call Butterfly Vs Short Put |
| Bear Call Spread Vs Long Combo | Short Call Butterfly Vs Long Combo | |
| Bear Call Spread Vs Synthetic Call | Short Call Butterfly Vs Synthetic Call | |
| Bear Call Spread Vs Long Put | Short Call Butterfly Vs Long Put | |
| Bear Call Spread Vs Long Call | Short Call Butterfly Vs Long Call | |
| Bear Call Spread Vs Covered Call | Short Call Butterfly Vs Covered Call | |
| Bear Call Spread Vs Covered Put | Short Call Butterfly Vs Covered Put | |
| Bear Call Spread Vs Protective Call | Short Call Butterfly Vs Protective Call | |
| Bear Call Spread Vs Short Box | Short Call Butterfly Vs Short Box | |
| Bear Call Spread Vs Long Call Condor | Short Call Butterfly Vs Long Call Condor | |
| Bear Call Spread Vs Short Call Condor | Short Call Butterfly Vs Short Call Condor | |
| Bear Call Spread Vs Box Spread | Short Call Butterfly Vs Box Spread | |
| Bear Call Spread Vs Short Strangle | Short Call Butterfly Vs Short Strangle | |
| Bear Call Spread Vs Long Strangle | Short Call Butterfly Vs Long Strangle | |
| Bear Call Spread Vs Collar Strategy | Short Call Butterfly Vs Collar Strategy | |
| Bear Call Spread Vs Long Straddle | Short Call Butterfly Vs Long Straddle | |
| Bear Call Spread Vs Short Straddle | Short Call Butterfly Vs Short Straddle | |
| Bear Call Spread Vs Long Call Butterfly | Short Call Butterfly Vs Long Call Butterfly | |
| Bear Call Spread Vs Short Call Butterfly | Short Call Butterfly Vs Short Call | |
| Bear Call Spread Vs Short Call | Short Call Butterfly Vs Bear Call Spread | |
| Bear Call Spread Vs Bear Put Spread | Short Call Butterfly Vs Bear Put Spread | |
| Bear Call Spread Vs Bull Call Spread | Short Call Butterfly Vs Bull Call Spread | |
| Bear Call Spread Vs Bull Put Spread | Short Call Butterfly Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Bear Call Spread Vs Short Call Butterfly option strategies.
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.
At the same time, if you as a trader are expecting price movement (without any idea of the direction) within a neutral market momentum – then short call butterfly is an optimal strategy for you.
There is a limited amount of risk involved and you can expect limited profit only in this options strategy.
Furthermore, as told above, it also depends on the market situation.
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