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 Short Put 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 Short Put 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 Short Put comparison:
| Comparison Aspect | Long Call | Short Put |
| 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 short put strategy is used when the investor is bullish towards the market and expects the prices to go up. He then sells the put option and makes a profit if...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. | Investor is obligated to sell the shares at the predetermined price, at the time of expiry, if the buyer of the put option chooses to exercise his option. |
| Market Position | Bullish | Bullish |
| Strategy Level Suitable for | Intermediates | Beginners |
| Options Traded | Call | Put |
| Number of Positions | 1 | 1 |
| Action Needed | Buy Call Option | Sell Put Option |
| Risk for You | Limited to Premium | Unlimited |
| Profit Potential | Unlimited | Limited |
| Break Even Point for Investor | Strike Price PLUS Premium | Strike Price MINUS Premium |
| Investor Intention | Exercise Option if Profitable, Let it go otherwise | Let Options Expire Worthlessly |
| Investor Expectation | Prices of Assets Go Up Sharply | Prices go up sharply |
| Strategy Summary | Attractive | Complex & Risky |
| Advantages | Unlimited Profits, Limited Loss, Low Investment | Steady source of income till market remains bullish |
| Disadvantages | Premium may eat up the Profits | High Risk, Limited Profit |
| Market Scenarios - Profit | 1 | 1 |
| Market Scenarios - Loss | 1 | 2 |
| Also called as | NA | Naked Put or Uncovered Put |
| More Comparisons | Long Call Vs Long Put | Short Put Vs Long Put |
| Long Call Vs Long Combo | Short Put Vs Long Combo | |
| Long Call Vs Synthetic Call | Short Put Vs Synthetic Call | |
| Long Call Vs Short Call | Short Put Vs Short Call | |
| Long Call Vs Short Put | Short Put Vs Long Call | |
| Long Call Vs Covered Call | Short Put Vs Covered Call | |
| Long Call Vs Covered Put | Short Put Vs Covered Put | |
| Long Call Vs Protective Call | Short Put Vs Protective Call | |
| Long Call Vs Short Box | Short Put Vs Short Box | |
| Long Call Vs Long Call Condor | Short Put Vs Long Call Condor | |
| Long Call Vs Short Call Condor | Short Put Vs Short Call Condor | |
| Long Call Vs Box Spread | Short Put Vs Box Spread | |
| Long Call Vs Short Strangle | Short Put Vs Short Strangle | |
| Long Call Vs Long Strangle | Short Put Vs Long Strangle | |
| Long Call Vs Collar Strategy | Short Put Vs Collar Strategy | |
| Long Call Vs Long Straddle | Short Put Vs Long Straddle | |
| Long Call Vs Short Straddle | Short Put Vs Short Straddle | |
| Long Call Vs Long Call Butterfly | Short Put Vs Long Call Butterfly | |
| Long Call Vs Short Call Butterfly | Short Put Vs Short Call Butterfly | |
| Long Call Vs Bear Call Spread | Short Put Vs Bear Call Spread | |
| Long Call Vs Bear Put Spread | Short Put Vs Bear Put Spread | |
| Long Call Vs Bull Call Spread | Short Put Vs Bull Call Spread | |
| Long Call Vs Bull Put Spread | Short Put Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Long Call Vs Short Put 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.
However, if your risk appetite is relatively high – then you can try Short Put although the profit potential in that strategy is limited.
Furthermore, as said above, it also depends on the market situation.
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