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 Long Straddle 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 Long Straddle 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 Long Straddle comparison:
| Comparison Aspect | Long Call | Long Straddle |
| 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 | Long Straddle comes into play when the trader expects the market to move sharply, however, the direction of the movement cannot be predicted. The purpose of the strategy to allow the traders to benefit from volatile markets...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 should be able to trade based on his/her conviction that the markets will move, without being concerned about the direction of the movement. |
| Market Position | Bullish | Neutral |
| Strategy Level Suitable for | Intermediates | Beginners |
| Options Traded | Call | Call, Put |
| Number of Positions | 1 | 2 |
| Action Needed | Buy Call Option | 1 ATM Call, 1 ATM Put |
| Risk for You | Limited to Premium | Limited |
| Profit Potential | Unlimited | Unlimited |
| Break Even Point for Investor | Strike Price PLUS Premium | Lower Breakeven = Strike Price of Put - Net Premium Upper breakeven = Strike Price of Call + Net Premium |
| Investor Intention | Exercise Option if Profitable, Let it go otherwise | Put & Call Options Expire Worthlessly |
| Investor Expectation | Prices of Assets Go Up Sharply | Sharp Market Movement |
| Strategy Summary | Attractive | Excellent & Simple |
| Advantages | Unlimited Profits, Limited Loss, Low Investment | Uni-Directional Profit, Unlimited Gains |
| Disadvantages | Premium may eat up the Profits | High Premium |
| Market Scenarios - Profit | 1 | 1 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | NA | NA |
| More Comparisons | Long Call Vs Long Put | Long Straddle Vs Short Put |
| Long Call Vs Long Combo | Long Straddle Vs Long Combo | |
| Long Call Vs Synthetic Call | Long Straddle Vs Synthetic Call | |
| Long Call Vs Short Call | Long Straddle Vs Long Put | |
| Long Call Vs Short Put | Long Straddle Vs Long Call | |
| Long Call Vs Covered Call | Long Straddle Vs Covered Call | |
| Long Call Vs Covered Put | Long Straddle Vs Covered Put | |
| Long Call Vs Protective Call | Long Straddle Vs Protective Call | |
| Long Call Vs Short Box | Long Straddle Vs Short Box | |
| Long Call Vs Long Call Condor | Long Straddle Vs Long Call Condor | |
| Long Call Vs Short Call Condor | Long Straddle Vs Short Call Condor | |
| Long Call Vs Box Spread | Long Straddle Vs Box Spread | |
| Long Call Vs Short Strangle | Long Straddle Vs Short Strangle | |
| Long Call Vs Long Strangle | Long Straddle Vs Long Strangle | |
| Long Call Vs Collar Strategy | Long Straddle Vs Collar Strategy | |
| Long Call Vs Long Straddle | Long Straddle Vs Short Call | |
| Long Call Vs Short Straddle | Long Straddle Vs Short Straddle | |
| Long Call Vs Long Call Butterfly | Long Straddle Vs Long Call Butterfly | |
| Long Call Vs Short Call Butterfly | Long Straddle Vs Short Call Butterfly | |
| Long Call Vs Bear Call Spread | Long Straddle Vs Bear Call Spread | |
| Long Call Vs Bear Put Spread | Long Straddle Vs Bear Put Spread | |
| Long Call Vs Bull Call Spread | Long Straddle Vs Bull Put Spread | |
| Long Call Vs Bull Put Spread | Long Straddle Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Long Call Vs Long Straddle 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 neutral market situation and are looking for unlimited profits from your share market trades, then you can opt to go for the Long Straddle strategy.
There is a limited amount of risk involved as well, however, there are good chances of high profits if the strategy is executed well.
Furthermore, as said above, it also depends on the market situation.
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