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 Strangle 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 Strangle 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 Strangle comparison:
| Comparison Aspect | Bear Call Spread | Short Strangle |
| 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 | The short strangle options trading strategy is an excellent strategy to be deployed when the investor is expecting little to no volatility in the market...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. | If the prediction does not come out true, the strategy can cause unlimited loss. |
| Market Position | Moderately Bearish | Neutral |
| Strategy Level Suitable for | Intermediates | Experts |
| Options Traded | Call | Call |
| Number of Positions | 2 | 4 |
| Action Needed | Buy OTM Call, Sell OTM Call | 1 Short ITM Call, 1 Long ITM Call, 1 Long OTM Call, 1 Short OTM Call |
| Risk for You | Limited | Limited |
| Profit Potential | Limited | Unlimited |
| Break Even Point for Investor | Strike Price of Short Call + Net Premium Received | Lower Breakeven = Lower Strike Price + Net Premium Upper breakeven = Higher Strike Price - Net Premium |
| Investor Intention | Let Options Expire Worthlessly | Stock price remains between the 2 option Strike Prices and the options expire worthlessly |
| Investor Expectation | Market to go down gradually, but moderately | Little or No Market Volatility |
| Strategy Summary | Limited Risk Limited Profit | Profits in Stable Market |
| Advantages | Profit when Market is going down, Limited Risk | Higher Range of Profit |
| Disadvantages | Limited Profit | Low Premium, Unlimited Risk |
| Market Scenarios - Profit | 2 | 1 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | NA | Credit Spread |
| More Comparisons | Bear Call Spread Vs Short Put | Short Strangle Vs Short Put |
| Bear Call Spread Vs Long Combo | Short Strangle Vs Long Combo | |
| Bear Call Spread Vs Synthetic Call | Short Strangle Vs Synthetic Call | |
| Bear Call Spread Vs Long Put | Short Strangle Vs Long Put | |
| Bear Call Spread Vs Long Call | Short Strangle Vs Long Call | |
| Bear Call Spread Vs Covered Call | Short Strangle Vs Covered Call | |
| Bear Call Spread Vs Covered Put | Short Strangle Vs Covered Put | |
| Bear Call Spread Vs Protective Call | Short Strangle Vs Protective Call | |
| Bear Call Spread Vs Short Box | Short Strangle Vs Short Box | |
| Bear Call Spread Vs Long Call Condor | Short Strangle Vs Long Call Condor | |
| Bear Call Spread Vs Short Call Condor | Short Strangle Vs Short Call Condor | |
| Bear Call Spread Vs Box Spread | Short Strangle Vs Box Spread | |
| Bear Call Spread Vs Short Strangle | Short Strangle Vs Short Call | |
| Bear Call Spread Vs Long Strangle | Short Strangle Vs Long Strangle | |
| Bear Call Spread Vs Collar Strategy | Short Strangle Vs Collar Strategy | |
| Bear Call Spread Vs Long Straddle | Short Strangle Vs Long Straddle | |
| Bear Call Spread Vs Short Straddle | Short Strangle Vs Short Straddle | |
| Bear Call Spread Vs Long Call Butterfly | Short Strangle Vs Long Call Butterfly | |
| Bear Call Spread Vs Short Call Butterfly | Short Strangle Vs Short Call Butterfly | |
| Bear Call Spread Vs Short Call | Short Strangle Vs Bear Call Spread | |
| Bear Call Spread Vs Bear Put Spread | Short Strangle Vs Bear Put Spread | |
| Bear Call Spread Vs Bull Call Spread | Short Strangle Vs Bull Call Spread | |
| Bear Call Spread Vs Bull Put Spread | Short Strangle Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Bear Call Spread Vs Short Strangle 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 are in a neutral market situation and have a limited risk appetite, then Short Strangle is a potential option strategy for you. Generally, this strategy is suitable when you are sure that there is going to be low or no market volatility at all.
The strategy, as well, comes with a limited profit potential.
Furthermore, as told above, it also depends on the market situation.
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