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 Long Call Butterfly Vs Box Spread 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 Long Call Butterfly Vs Box Spread 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 Long Call Butterfly Vs Box Spread comparison:
| Comparison Aspect | Long Call Butterfly | Box Spread |
| 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 | Box Spread is an arbitrage strategy in which two complementary positions are taken that balance out the risk of each other. This makes the box spread an almost risk-free strategy...more |
| Investor Obligation | Create Bull Spread when High Market Expectations, Create Bear Spread when Low Market Expectations. | The trader has the obligation to keep the positions open till they reach their respective expirations. |
| Market Position | Neutral | Neutral |
| Strategy Level Suitable for | Intermediates | Intermediates |
| Options Traded | Call | Call, Put |
| Number of Positions | 4 | 4 |
| Action Needed | 2 ATM, 1 ITM, 1 OTM Calls | 1 Long ITM Call, 1 Short OTM Call, 1 Long ITM Put, 1 Short OTM Put |
| Risk for You | Limited | None |
| 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 | NA |
| Investor Intention | Options expire worthless except the one with the lower strike price | Choose the Correct Stike Prices |
| Investor Expectation | No Movement in Price of the Underlying Asset | Short-term demand shifts of the options in the market. |
| Strategy Summary | Effective | Complicated |
| Advantages | Profits in Low Market Volatility, Limited Risks | Risk Free, Direction Neutral |
| Disadvantages | Limited Profit, High Premium | Limited Profit, High Margin Maintenance, Positions cannot be closed before expiry. |
| Market Scenarios - Profit | 1 | 2 |
| Market Scenarios - Loss | 1 | 0 |
| Also called as | NA | NA |
| More Comparisons | Long Call Butterfly Vs Short Put | Box Spread Vs Short Put |
| Long Call Butterfly Vs Long Combo | Box Spread Vs Long Combo | |
| Long Call Butterfly Vs Synthetic Call | Box Spread Vs Synthetic Call | |
| Long Call Butterfly Vs Long Put | Box Spread Vs Long Put | |
| Long Call Butterfly Vs Long Call | Box Spread Vs Long Call | |
| Long Call Butterfly Vs Covered Call | Box Spread Vs Covered Call | |
| Long Call Butterfly Vs Covered Put | Box Spread Vs Covered Put | |
| Long Call Butterfly Vs Protective Call | Box Spread Vs Protective Call | |
| Long Call Butterfly Vs Short Box | Box Spread Vs Short Box | |
| Long Call Butterfly Vs Long Call Condor | Box Spread Vs Long Call Condor | |
| Long Call Butterfly Vs Short Call Condor | Box Spread Vs Short Call Condor | |
| Long Call Butterfly Vs Box Spread | Box Spread Vs Short Call | |
| Long Call Butterfly Vs Short Strangle | Box Spread Vs Short Strangle | |
| Long Call Butterfly Vs Long Strangle | Box Spread Vs Long Strangle | |
| Long Call Butterfly Vs Collar Strategy | Box Spread Vs Collar Strategy | |
| Long Call Butterfly Vs Long Straddle | Box Spread Vs Long Straddle | |
| Long Call Butterfly Vs Short Straddle | Box Spread Vs Short Straddle | |
| Long Call Butterfly Vs Short Call | Box Spread Vs Long Call Butterfly | |
| Long Call Butterfly Vs Short Call Butterfly | Box Spread Vs Short Call Butterfly | |
| Long Call Butterfly Vs Bear Call Spread | Box Spread Vs Bear Call Spread | |
| Long Call Butterfly Vs Bear Put Spread | Box Spread Vs Bear Put Spread | |
| Long Call Butterfly Vs Bull Call Spread | Box Spread Vs Bull Call Spread | |
| Long Call Butterfly Vs Bull Put Spread | Box Spread Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Long Call Butterfly Vs Box Spread option strategies.
At the same time, if you are in a neutral market situation and are looking for consistent but limited profits for your share market trades, then you can opt to go for the Box spread strategy.
At the same time, 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.
Furthermore, as said 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.
