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 Long 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 Put Vs Long 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 Put Vs Long Call comparison:
| Comparison Aspect | Long Put | Long Call |
| 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 | 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 |
| 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 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. |
| Market Position | Bearish | Bullish |
| Strategy Level Suitable for | Beginners | Intermediates |
| Options Traded | Put | Call |
| Number of Positions | 1 | 1 |
| Action Needed | Buy Put Option | Buy Call Option |
| Risk for You | Limited | Limited to Premium |
| Profit Potential | Unlimited | Unlimited |
| Break Even Point for Investor | Strike Price MINUS Premium | Strike Price PLUS Premium |
| Investor Intention | Let Options Expire Worthlessly | Exercise Option if Profitable, Let it go otherwise |
| Investor Expectation | Prices of Assets go down | Prices of Assets Go Up Sharply |
| Strategy Summary | Effective | Attractive |
| Advantages | Unlimited Profits, Profits possible even in Bearish Market | Unlimited Profits, Limited Loss, Low Investment |
| Disadvantages | High Premium | Premium may eat up the Profits |
| Market Scenarios - Profit | 2 | 1 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | NA | NA |
| More Comparisons | Long Put Vs Short Put | Long Call Vs Long Put |
| Long Put Vs Long Combo | Long Call Vs Long Combo | |
| Long Put Vs Synthetic Call | Long Call Vs Synthetic Call | |
| Long Put Vs Short Call | Long Call Vs Short Call | |
| Long Put Vs Long Call | Long Call Vs Short Put | |
| Long Put Vs Covered Call | Long Call Vs Covered Call | |
| Long Put Vs Covered Put | Long Call Vs Covered Put | |
| Long Put Vs Protective Call | Long Call Vs Protective Call | |
| Long Put Vs Short Box | Long Call Vs Short Box | |
| Long Put Vs Long Call Condor | Long Call Vs Long Call Condor | |
| Long Put Vs Short Call Condor | Long Call Vs Short Call Condor | |
| Long Put Vs Box Spread | Long Call Vs Box Spread | |
| Long Put Vs Short Strangle | Long Call Vs Short Strangle | |
| Long Put Vs Long Strangle | Long Call Vs Long Strangle | |
| Long Put Vs Collar Strategy | Long Call Vs Collar Strategy | |
| Long Put Vs Long Straddle | Long Call Vs Long Straddle | |
| Long Put Vs Short Straddle | Long Call Vs Short Straddle | |
| Long Put Vs Long Call Butterfly | Long Call Vs Long Call Butterfly | |
| Long Put Vs Short Call Butterfly | Long Call Vs Short Call Butterfly | |
| Long Put Vs Bear Call Spread | Long Call Vs Bear Call Spread | |
| Long Put Vs Bear Put Spread | Long Call Vs Bear Put Spread | |
| Long Put Vs Bull Call Spread | Long Call Vs Bull Call Spread | |
| Long Put Vs Bull Put Spread | Long Call Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Long Put Vs Long Call 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 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, 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.
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