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 Collar Strategy Vs Long 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 Collar Strategy Vs Long 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 Collar Strategy Vs Long Call Butterfly comparison:
| Comparison Aspect | Long Call Butterfly | Collar Strategy |
| View |  |  |
| Strategy Introduction | Long Call Butterfly is the options trading strategy which is used when the trader has a neutral outlook towards the market and expects the prices to remain range-bound...more | The collar strategy is used when the trader is mildly bullish towards the market. He expects the prices to go up, but at the same time, he wants to limit his risks if the prices go down. It is ideally not used by the...more |
| Investor Obligation | Create Bull Spread when High Market Expectations, Create Bear Spread when Low Market Expectations. | The trader is able to benefit from the price rise by holding the underlying security and receives ownership benefits like dividends. At the same time, the risks are limited with the use of protective put. |
| Market Position | Neutral | Moderately Bullish |
| Strategy Level Suitable for | Intermediates | Experts |
| Options Traded | Call | Call, Put and Underlying |
| Number of Positions | 4 | 3 |
| Action Needed | 2 ATM, 1 ITM, 1 OTM Calls | Sell OTM Call, Buy OTM Put, Hold underlying |
| Risk for You | Limited | Limited |
| Profit Potential | Limited | Limited |
| Break Even Point for Investor | Lower Break-even = Lower Strike Price + Net Premium Upper Break-even = Higher Strike Price - Net Premium | Price of Features - Call Premium + Put Premium |
| Investor Intention | Options expire worthless except the one with the lower strike price | Let Options Expire Worthlessly |
| Investor Expectation | No Movement in Price of the Underlying Asset | Prices of Assets Go Up |
| Strategy Summary | Effective | High Potential |
| Advantages | Profits in Low Market Volatility, Limited Risks | Dividend Benefits, Limited Risk |
| Disadvantages | Limited Profit, High Premium | Limited Profits |
| Market Scenarios - Profit | 1 | 1 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | NA | NA |
| More Comparisons | Long Call Butterfly Vs Short Put | Collar Strategy Vs Short Put |
| Long Call Butterfly Vs Long Combo | Collar Strategy Vs Long Combo | |
| Long Call Butterfly Vs Synthetic Call | Collar Strategy Vs Synthetic Call | |
| Long Call Butterfly Vs Long Put | Collar Strategy Vs Long Put | |
| Long Call Butterfly Vs Long Call | Collar Strategy Vs Long Call | |
| Long Call Butterfly Vs Covered Call | Collar Strategy Vs Covered Call | |
| Long Call Butterfly Vs Covered Put | Collar Strategy Vs Covered Put | |
| Long Call Butterfly Vs Protective Call | Collar Strategy Vs Protective Call | |
| Long Call Butterfly Vs Short Box | Collar Strategy Vs Short Box | |
| Long Call Butterfly Vs Long Call Condor | Collar Strategy Vs Long Call Condor | |
| Long Call Butterfly Vs Short Call Condor | Collar Strategy Vs Short Call Condor | |
| Long Call Butterfly Vs Box Spread | Collar Strategy Vs Box Spread | |
| Long Call Butterfly Vs Short Strangle | Collar Strategy Vs Short Strangle | |
| Long Call Butterfly Vs Long Strangle | Collar Strategy Vs Long Strangle | |
| Long Call Butterfly Vs Collar Strategy | Collar Strategy Vs Short Call | |
| Long Call Butterfly Vs Long Straddle | Collar Strategy Vs Long Straddle | |
| Long Call Butterfly Vs Short Straddle | Collar Strategy Vs Short Straddle | |
| Long Call Butterfly Vs Short Call | Collar Strategy Vs Long Call Butterfly | |
| Long Call Butterfly Vs Short Call Butterfly | Collar Strategy Vs Short Call Butterfly | |
| Long Call Butterfly Vs Bear Call Spread | Collar Strategy Vs Bear Call Spread | |
| Long Call Butterfly Vs Bear Put Spread | Collar Strategy Vs Bear Put Spread | |
| Long Call Butterfly Vs Bull Call Spread | Collar Strategy Vs Bull Call Spread | |
| Long Call Butterfly Vs Bull Put Spread | Collar Strategy Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Collar Strategy Vs Long Call Butterfly option strategies.
Furthermore, if you are in a neutral market situation and want to take a limited risk, then Long Call Butterfly is one of the options trading strategies you can look out for.
The profit you get using this strategy is also limited in scope.
At the same time, if you are in a moderately Bullish Market situation and are looking for consistent but limited profits for your share market trades, then you can opt to go for the Collar Strategy. There is a limited scope of risk involved in this strategy too.
This needs to be known that the profit you get using these strategies is also limited in scope.
Furthermore, as told above, it also depends on the market situation.
In case you are looking to trade in options segment or share market in general, let us assist you in that. Just fill the form below and we will take you to the steps ahead.
