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 Strangle 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 Strangle 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 Strangle comparison:
| Comparison Aspect | Long Call | Long Strangle |
| 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 long strangle strategy helps the trader to take advantage of the volatility in the market. It is a trend neutral strategy, so the trader does not need to be certain of the direction...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. | It is a trend neutral strategy, so the trader does not need to be certain of the direction of the price movement. |
| Market Position | Bullish | Neutral |
| Strategy Level Suitable for | Intermediates | Intermediates |
| Options Traded | Call | Call, Put |
| Number of Positions | 1 | 2 |
| Action Needed | Buy Call Option | One OTM Put, One OTM Call |
| Risk for You | Limited to Premium | Limited |
| Profit Potential | Unlimited | Unlimited |
| Break Even Point for Investor | Strike Price PLUS Premium | Lower Breakeven Point = Strike Price of Put - Net Premium Upper Breakeven Point = Strike Price of Call + Net Premium |
| Investor Intention | Exercise Option if Profitable, Let it go otherwise | Both call and put options expire worthlessly |
| Investor Expectation | Prices of Assets Go Up Sharply | Market Shows High Volatility |
| Strategy Summary | Attractive | Attractive |
| Advantages | Unlimited Profits, Limited Loss, Low Investment | Less Expensive, Limited Risk, Unlimited Gain |
| Disadvantages | Premium may eat up the Profits | Price Movement has to be Big |
| Market Scenarios - Profit | 1 | 2 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | NA | NA |
| More Comparisons | Long Call Vs Long Put | Long Strangle Vs Short Put |
| Long Call Vs Long Combo | Long Strangle Vs Long Combo | |
| Long Call Vs Synthetic Call | Long Strangle Vs Synthetic Call | |
| Long Call Vs Short Call | Long Strangle Vs Long Put | |
| Long Call Vs Short Put | Long Strangle Vs Long Call | |
| Long Call Vs Covered Call | Long Strangle Vs Covered Call | |
| Long Call Vs Covered Put | Long Strangle Vs Covered Put | |
| Long Call Vs Protective Call | Long Strangle Vs Protective Call | |
| Long Call Vs Short Box | Long Strangle Vs Short Box | |
| Long Call Vs Long Call Condor | Long Strangle Vs Long Call Condor | |
| Long Call Vs Short Call Condor | Long Strangle Vs Short Call Condor | |
| Long Call Vs Box Spread | Long Strangle Vs Box Spread | |
| Long Call Vs Short Strangle | Long Strangle Vs Short Strangle | |
| Long Call Vs Long Strangle | Long Strangle Vs Short Call | |
| Long Call Vs Collar Strategy | Long Strangle Vs Collar Strategy | |
| Long Call Vs Long Straddle | Long Strangle Vs Long Straddle | |
| Long Call Vs Short Straddle | Long Strangle Vs Short Straddle | |
| Long Call Vs Long Call Butterfly | Long Strangle Vs Long Call Butterfly | |
| Long Call Vs Short Call Butterfly | Long Strangle Vs Short Call Butterfly | |
| Long Call Vs Bear Call Spread | Long Strangle Vs Bear Call Spread | |
| Long Call Vs Bear Put Spread | Long Strangle Vs Bear Put Spread | |
| Long Call Vs Bull Call Spread | Long Strangle Vs Bull Call Spread | |
| Long Call Vs Bull Put Spread | Long Strangle Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Long Call Vs Long Strangle 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 Strangle strategy. Just remember, you need to be aware of the “right” strike prices for optimal gains.
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.
