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 Synthetic 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 Synthetic 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 Synthetic Call comparison:
| Comparison Aspect | Bear Call Spread | Synthetic Call |
| 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 | Synthetic Call is an options strategy in which an underlying asset is combined with a put option to protect against depreciation in the value of the underlying asset. The overall effect is similar to...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. | Stay with the position |
| Market Position | Moderately Bearish | Bullish |
| Strategy Level Suitable for | Intermediates | Beginners |
| Options Traded | Call | Put |
| Number of Positions | 2 | 2 (Underlying + Put) |
| Action Needed | Buy OTM Call, Sell OTM Call | Holds a long position in an underlying asset and a put option on the same stock |
| Risk for You | Limited | Limited |
| Profit Potential | Limited | Unlimited |
| Break Even Point for Investor | Strike Price of Short Call + Net Premium Received | Underlying Price + Put Premium |
| Investor Intention | Let Options Expire Worthlessly | Save Transaction Costs, Stay Protected from downward market movement. |
| Investor Expectation | Market to go down gradually, but moderately | Prices of the Assets to Go Up |
| Strategy Summary | Limited Risk Limited Profit | Profitable |
| Advantages | Profit when Market is going down, Limited Risk | Dividends on Stocks, Limited Risk, Unlimited Profit |
| Disadvantages | Limited Profit | Chances of loss if the underlying goes down |
| Market Scenarios - Profit | 2 | 1 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | NA | NA |
| More Comparisons | Bear Call Spread Vs Short Put | Synthetic Call Vs Short Put |
| Bear Call Spread Vs Long Combo | Synthetic Call Vs Long Combo | |
| Bear Call Spread Vs Synthetic Call | Synthetic Call Vs Short Call | |
| Bear Call Spread Vs Long Put | Synthetic Call Vs Long Put | |
| Bear Call Spread Vs Long Call | Synthetic Call Vs Long Call | |
| Bear Call Spread Vs Covered Call | Synthetic Call Vs Covered Call | |
| Bear Call Spread Vs Covered Put | Synthetic Call Vs Covered Put | |
| Bear Call Spread Vs Protective Call | Synthetic Call Vs Protective Call | |
| Bear Call Spread Vs Short Box | Synthetic Call Vs Short Box | |
| Bear Call Spread Vs Long Call Condor | Synthetic Call Vs Long Call Condor | |
| Bear Call Spread Vs Short Call Condor | Synthetic Call Vs Short Call Condor | |
| Bear Call Spread Vs Box Spread | Synthetic Call Vs Box Spread | |
| Bear Call Spread Vs Short Strangle | Synthetic Call Vs Short Strangle | |
| Bear Call Spread Vs Long Strangle | Synthetic Call Vs Long Strangle | |
| Bear Call Spread Vs Collar Strategy | Synthetic Call Vs Collar Strategy | |
| Bear Call Spread Vs Long Straddle | Synthetic Call Vs Long Straddle | |
| Bear Call Spread Vs Short Straddle | Synthetic Call Vs Short Straddle | |
| Bear Call Spread Vs Long Call Butterfly | Synthetic Call Vs Long Call Butterfly | |
| Bear Call Spread Vs Short Call Butterfly | Synthetic Call Vs Short Call Butterfly | |
| Bear Call Spread Vs Short Call | Synthetic Call Vs Bear Call Spread | |
| Bear Call Spread Vs Bear Put Spread | Synthetic Call Vs Bear Put Spread | |
| Bear Call Spread Vs Bull Call Spread | Synthetic Call Vs Bull Call Spread | |
| Bear Call Spread Vs Bull Put Spread | Synthetic Call Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Bear Call Spread Vs Synthetic Call 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.
If you are looking at a bearish market momentum and are open towards a limited risk with a potential of unlimited profits, then Synthetic Call options strategy is definitely a positive go for you.
Be aware of all the related aspects (like the ones listed above) and then make a choice for yourself.
Furthermore, as told above, it also depends on the market situation.
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