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 Straddle 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 Straddle 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 Straddle comparison:
| Comparison Aspect | Long Put | Long Straddle |
| 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 | Long Straddle comes into play when the trader expects the market to move sharply, however, the direction of the movement cannot be predicted. The purpose of the strategy to allow the traders to benefit from volatile markets...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 should be able to trade based on his/her conviction that the markets will move, without being concerned about the direction of the movement. |
| Market Position | Bearish | Neutral |
| Strategy Level Suitable for | Beginners | Beginners |
| Options Traded | Put | Call, Put |
| Number of Positions | 1 | 2 |
| Action Needed | Buy Put Option | 1 ATM Call, 1 ATM Put |
| Risk for You | Limited | Limited |
| Profit Potential | Unlimited | Unlimited |
| Break Even Point for Investor | Strike Price MINUS Premium | Lower Breakeven = Strike Price of Put - Net Premium Upper breakeven = Strike Price of Call + Net Premium |
| Investor Intention | Let Options Expire Worthlessly | Put & Call Options Expire Worthlessly |
| Investor Expectation | Prices of Assets Go Down | Sharp Market Movement |
| Strategy Summary | Effective | Excellent & Simple |
| Advantages | Unlimited Profits, Profits possible even in Bearish Market | Uni-Directional Profit, Unlimited Gains |
| Disadvantages | High Premium | High Premium |
| Market Scenarios - Profit | 2 | 1 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | NA | NA |
| More Comparisons | Long Put Vs Short Put | Long Straddle Vs Short Put |
| Long Put Vs Long Combo | Long Straddle Vs Long Combo | |
| Long Put Vs Synthetic Call | Long Straddle Vs Synthetic Call | |
| Long Put Vs Short Call | Long Straddle Vs Long Put | |
| Long Put Vs Long Call | Long Straddle Vs Long Call | |
| Long Put Vs Covered Call | Long Straddle Vs Covered Call | |
| Long Put Vs Covered Put | Long Straddle Vs Covered Put | |
| Long Put Vs Protective Call | Long Straddle Vs Protective Call | |
| Long Put Vs Short Box | Long Straddle Vs Short Box | |
| Long Put Vs Long Call Condor | Long Straddle Vs Long Call Condor | |
| Long Put Vs Short Call Condor | Long Straddle Vs Short Call Condor | |
| Long Put Vs Box Spread | Long Straddle Vs Box Spread | |
| Long Put Vs Short Strangle | Long Straddle Vs Short Strangle | |
| Long Put Vs Long Strangle | Long Straddle Vs Long Strangle | |
| Long Put Vs Collar Strategy | Long Straddle Vs Collar Strategy | |
| Long Put Vs Long Straddle | Long Straddle Vs Short Call | |
| Long Put Vs Short Straddle | Long Straddle Vs Short Straddle | |
| Long Put Vs Long Call Butterfly | Long Straddle Vs Long Call Butterfly | |
| Long Put Vs Short Call Butterfly | Long Straddle Vs Short Call Butterfly | |
| Long Put Vs Bear Call Spread | Long Straddle Vs Bear Call Spread | |
| Long Put Vs Bear Put Spread | Long Straddle Vs Bear Put Spread | |
| Long Put Vs Bull Call Spread | Long Straddle Vs Bull Put Spread | |
| Long Put Vs Bull Put Spread | Long Straddle Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Long Put Vs Long Straddle 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 unlimited profits from your share market trades, then you can opt to go for the Long Straddle strategy.
There is a limited amount of risk involved as well, however, there are good chances of high profits if the strategy is executed well.
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.
