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 Put Vs Box Spread 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 Put Vs Box Spread 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 Put Vs Box Spread comparison:
| Comparison Aspect | Long Put | Box Spread |
| View |  |  |
| Strategy Introduction | Long Put is used when the trader has a bearish view on the market and expects the price of the asset to go down. He will then wait for the prices to go down and then exercise his option...more | Box Spread is an arbitrage strategy in which two complementary positions are taken that balance out the risk of each other. This makes the box spread an almost risk-free strategy...more |
| Investor Obligation | The strategy gives the trader a right to buy the put option on expiry, but not the obligation. The trader may choose to buy the option or not. | The trader has the obligation to keep the positions open till they reach their respective expirations. |
| Market Position | Bearish | Neutral |
| Strategy Level Suitable for | Beginners | Intermediates |
| Options Traded | Put | Call, Put |
| Number of Positions | 1 | 4 |
| Action Needed | Buy Put Option | 1 Long ITM Call, 1 Short OTM Call, 1 Long ITM Put, 1 Short OTM Put |
| Risk for You | Limited | None |
| Profit Potential | Unlimited | Limited |
| Break Even Point for Investor | Strike Price MINUS Premium | NA |
| Investor Intention | Let Options Expire Worthlessly | Choose the Correct Stike Prices |
| Investor Expectation | Prices of Assets Go Down | Short-term demand shifts of the options in the market. |
| Strategy Summary | Effective | Complicated |
| Advantages | Unlimited Profits, Profits possible even in Bearish Market | Risk Free, Direction Neutral |
| Disadvantages | High Premium | Limited Profit, High Margin Maintenance, Positions cannot be closed before expiry. |
| Market Scenarios - Profit | 2 | 2 |
| Market Scenarios - Loss | 1 | 0 |
| Also called as | NA | NA |
| More Comparisons | Long Put Vs Short Put | Box Spread Vs Short Put |
| Long Put Vs Long Combo | Box Spread Vs Long Combo | |
| Long Put Vs Synthetic Call | Box Spread Vs Synthetic Call | |
| Long Put Vs Short Call | Box Spread Vs Long Put | |
| Long Put Vs Long Call | Box Spread Vs Long Call | |
| Long Put Vs Covered Call | Box Spread Vs Covered Call | |
| Long Put Vs Covered Put | Box Spread Vs Covered Put | |
| Long Put Vs Protective Call | Box Spread Vs Protective Call | |
| Long Put Vs Short Box | Box Spread Vs Short Box | |
| Long Put Vs Long Call Condor | Box Spread Vs Long Call Condor | |
| Long Put Vs Short Call Condor | Box Spread Vs Short Call Condor | |
| Long Put Vs Box Spread | Box Spread Vs Short Call | |
| Long Put Vs Short Strangle | Box Spread Vs Short Strangle | |
| Long Put Vs Long Strangle | Box Spread Vs Long Strangle | |
| Long Put Vs Collar Strategy | Box Spread Vs Collar Strategy | |
| Long Put Vs Long Straddle | Box Spread Vs Long Straddle | |
| Long Put Vs Short Straddle | Box Spread Vs Short Straddle | |
| Long Put Vs Long Call Butterfly | Box Spread Vs Long Call Butterfly | |
| Long Put Vs Short Call Butterfly | Box Spread Vs Short Call Butterfly | |
| Long Put Vs Bear Call Spread | Box Spread Vs Bear Call Spread | |
| Long Put Vs Bear Put Spread | Box Spread Vs Bear Put Spread | |
| Long Put Vs Bull Call Spread | Box Spread Vs Bull Call Spread | |
| Long Put Vs Bull Put Spread | Box Spread Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Long Put Vs Box Spread option strategies.
As mentioned above, if you are a beginner level trader and are looking for unlimited profits with limited risk – it makes sense for you to employ the Long Put Option Strategy. At the same time, if you are in a neutral market situation and are looking for consistent but limited profits for your share market trades, then you can opt to go for the Box spread strategy.
At the same time, be aware of all the related aspects (like the ones listed above) and then make a choice for yourself.
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.
