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 Synthetic Call 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 Synthetic Call 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 Synthetic Call comparison:
| Comparison Aspect | Long Call | Synthetic Call |
| 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 | Synthetic Call is an options strategy in which an underlying asset is combined with a put option to protect against depreciation in the value of the underlying asset. The overall effect is similar to...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. | Stay with the position |
| Market Position | Bullish | Bullish |
| Strategy Level Suitable for | Intermediates | Beginners |
| Options Traded | Call | Put |
| Number of Positions | 1 | 2 (Underlying + Put) |
| Action Needed | Buy Call Option | Holds a long position in an underlying asset and a put option on the same stock |
| Risk for You | Limited to Premium | Limited |
| Profit Potential | Unlimited | Unlimited |
| Break Even Point for Investor | Strike Price PLUS Premium | Underlying Price + Put Premium |
| Investor Intention | Exercise Option if Profitable, Let it go otherwise | Save Transaction Costs, Stay Protected from downward market movement. |
| Investor Expectation | Prices of Assets Go Up Sharply | Prices of the Assets to Go Up |
| Strategy Summary | Attractive | Profitable |
| Advantages | Unlimited Profits, Limited Loss, Low Investment | Dividends on Stocks, Limited Risk, Unlimited Profit |
| Disadvantages | Premium may eat up the Profits | Chances of loss if the underlying goes down |
| Market Scenarios - Profit | 1 | 1 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | NA | NA |
| More Comparisons | Long Call Vs Long Put | Synthetic Call Vs Short Put |
| Long Call Vs Long Combo | Synthetic Call Vs Long Combo | |
| Long Call Vs Synthetic Call | Synthetic Call Vs Short Call | |
| Long Call Vs Short Call | Synthetic Call Vs Long Put | |
| Long Call Vs Short Put | Synthetic Call Vs Long Call | |
| Long Call Vs Covered Call | Synthetic Call Vs Covered Call | |
| Long Call Vs Covered Put | Synthetic Call Vs Covered Put | |
| Long Call Vs Protective Call | Synthetic Call Vs Protective Call | |
| Long Call Vs Short Box | Synthetic Call Vs Short Box | |
| Long Call Vs Long Call Condor | Synthetic Call Vs Long Call Condor | |
| Long Call Vs Short Call Condor | Synthetic Call Vs Short Call Condor | |
| Long Call Vs Box Spread | Synthetic Call Vs Box Spread | |
| Long Call Vs Short Strangle | Synthetic Call Vs Short Strangle | |
| Long Call Vs Long Strangle | Synthetic Call Vs Long Strangle | |
| Long Call Vs Collar Strategy | Synthetic Call Vs Collar Strategy | |
| Long Call Vs Long Straddle | Synthetic Call Vs Long Straddle | |
| Long Call Vs Short Straddle | Synthetic Call Vs Short Straddle | |
| Long Call Vs Long Call Butterfly | Synthetic Call Vs Long Call Butterfly | |
| Long Call Vs Short Call Butterfly | Synthetic Call Vs Short Call Butterfly | |
| Long Call Vs Bear Call Spread | Synthetic Call Vs Bear Call Spread | |
| Long Call Vs Bear Put Spread | Synthetic Call Vs Bear Put Spread | |
| Long Call Vs Bull Call Spread | Synthetic Call Vs Bull Call Spread | |
| Long Call Vs Bull Put Spread | Synthetic Call Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Long Call Vs Synthetic Call 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 looking at a bearish market momentum and are open towards a limited risk with a potential of unlimited profits, then Synthetic Call options strategy is definitely a positive go for you.
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.