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 Vs Collar Strategy 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 Vs Collar Strategy 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 Vs Collar Strategy comparison:
| Comparison Aspect | Long Call | Collar Strategy |
| View |  |  |
| Strategy Introduction | In Long Call Strategy, the trader enters into a contract to buy a call option when he is bullish towards the market. The trader anticipates that the price of the security will go up in the future. However, he does not want to take the risk of buying the security outright...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 | The trader has the right to buy a security at a future date at a predefined price. The term long itself means buying a security or buying an option. | 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 | Bullish | Moderately Bullish |
| Strategy Level Suitable for | Intermediates | Experts |
| Options Traded | Call | Call, Put and Underlying |
| Number of Positions | 1 | 3 |
| Action Needed | Buy Call Option | Sell OTM Call, Buy OTM Put, Hold underlying |
| Risk for You | Limited to Premium | Limited |
| Profit Potential | Unlimited | Limited |
| Break Even Point for Investor | Strike Price PLUS Premium | Price of Features - Call Premium + Put Premium |
| Investor Intention | Exercise Option if Profitable, Let it go otherwise | Let Options Expire Worthlessly |
| Investor Expectation | Prices of Assets Go Up Sharply | Prices of Assets Go Up |
| Strategy Summary | Attractive | High Potential |
| Advantages | Unlimited Profits, Limited Loss, Low Investment | Dividend Benefits, Limited Risk |
| Disadvantages | Premium may eat up the Profits | Limited Profits |
| Market Scenarios - Profit | 1 | 1 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | NA | NA |
| More Comparisons | Long Call Vs Long Put | Collar Strategy Vs Short Put |
| Long Call Vs Long Combo | Collar Strategy Vs Long Combo | |
| Long Call Vs Synthetic Call | Collar Strategy Vs Synthetic Call | |
| Long Call Vs Short Call | Collar Strategy Vs Long Put | |
| Long Call Vs Short Put | Collar Strategy Vs Long Call | |
| Long Call Vs Covered Call | Collar Strategy Vs Covered Call | |
| Long Call Vs Covered Put | Collar Strategy Vs Covered Put | |
| Long Call Vs Protective Call | Collar Strategy Vs Protective Call | |
| Long Call Vs Short Box | Collar Strategy Vs Short Box | |
| Long Call Vs Long Call Condor | Collar Strategy Vs Long Call Condor | |
| Long Call Vs Short Call Condor | Collar Strategy Vs Short Call Condor | |
| Long Call Vs Box Spread | Collar Strategy Vs Box Spread | |
| Long Call Vs Short Strangle | Collar Strategy Vs Short Strangle | |
| Long Call Vs Long Strangle | Collar Strategy Vs Long Strangle | |
| Long Call Vs Collar Strategy | Collar Strategy Vs Short Call | |
| Long Call Vs Long Straddle | Collar Strategy Vs Long Straddle | |
| Long Call Vs Short Straddle | Collar Strategy Vs Short Straddle | |
| Long Call Vs Long Call Butterfly | Collar Strategy Vs Long Call Butterfly | |
| Long Call Vs Short Call Butterfly | Collar Strategy Vs Short Call Butterfly | |
| Long Call Vs Bear Call Spread | Collar Strategy Vs Bear Call Spread | |
| Long Call Vs Bear Put Spread | Collar Strategy Vs Bear Put Spread | |
| Long Call Vs Bull Call Spread | Collar Strategy Vs Bull Call Spread | |
| Long Call Vs Bull Put Spread | Collar Strategy Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Long Call Vs Collar Strategy option strategies.
As mentioned above, if you are in a Bullish market situation and want to make unlimited profits on your trades, then Long Call is one of the options trading strategies you can opt for. The risk involved in this strategy is more than limited and thus, the strategy can only work for higher profits if you have the experience to run similar strategies in the past.
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 this strategy is also limited in scope.
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.
