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 Strangle 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 Strangle 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 Strangle comparison:
| Comparison Aspect | Long Put | Long Strangle |
| 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 | The long strangle strategy helps the trader to take advantage of the volatility in the market. It is a trend neutral strategy, so the trader does not need to be certain of the direction...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. | It is a trend neutral strategy, so the trader does not need to be certain of the direction of the price movement. |
| Market Position | Bearish | Neutral |
| Strategy Level Suitable for | Beginners | Intermediates |
| Options Traded | Put | Call, Put |
| Number of Positions | 1 | 2 |
| Action Needed | Buy Put Option | One OTM Put, One OTM Call |
| Risk for You | Limited | Limited |
| Profit Potential | Unlimited | Unlimited |
| Break Even Point for Investor | Strike Price MINUS Premium | Lower Breakeven Point = Strike Price of Put - Net Premium Upper Breakeven Point = Strike Price of Call + Net Premium |
| Investor Intention | Let Options Expire Worthlessly | Both call and put options expire worthlessly |
| Investor Expectation | Prices of Assets Go Down | Market Shows High Volatility |
| Strategy Summary | Effective | Attractive |
| Advantages | Unlimited Profits, Profits possible even in Bearish Market | Less Expensive, Limited Risk, Unlimited Gain |
| Disadvantages | High Premium | Price Movement has to be Big |
| Market Scenarios - Profit | 2 | 2 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | NA | NA |
| More Comparisons | Long Put Vs Short Put | Long Strangle Vs Short Put |
| Long Put Vs Long Combo | Long Strangle Vs Long Combo | |
| Long Put Vs Synthetic Call | Long Strangle Vs Synthetic Call | |
| Long Put Vs Short Call | Long Strangle Vs Long Put | |
| Long Put Vs Long Call | Long Strangle Vs Long Call | |
| Long Put Vs Covered Call | Long Strangle Vs Covered Call | |
| Long Put Vs Covered Put | Long Strangle Vs Covered Put | |
| Long Put Vs Protective Call | Long Strangle Vs Protective Call | |
| Long Put Vs Short Box | Long Strangle Vs Short Box | |
| Long Put Vs Long Call Condor | Long Strangle Vs Long Call Condor | |
| Long Put Vs Short Call Condor | Long Strangle Vs Short Call Condor | |
| Long Put Vs Box Spread | Long Strangle Vs Box Spread | |
| Long Put Vs Short Strangle | Long Strangle Vs Short Strangle | |
| Long Put Vs Long Strangle | Long Strangle Vs Short Call | |
| Long Put Vs Collar Strategy | Long Strangle Vs Collar Strategy | |
| Long Put Vs Long Straddle | Long Strangle Vs Long Straddle | |
| Long Put Vs Short Straddle | Long Strangle Vs Short Straddle | |
| Long Put Vs Long Call Butterfly | Long Strangle Vs Long Call Butterfly | |
| Long Put Vs Short Call Butterfly | Long Strangle Vs Short Call Butterfly | |
| Long Put Vs Bear Call Spread | Long Strangle Vs Bear Call Spread | |
| Long Put Vs Bear Put Spread | Long Strangle Vs Bear Put Spread | |
| Long Put Vs Bull Call Spread | Long Strangle Vs Bull Call Spread | |
| Long Put Vs Bull Put Spread | Long Strangle Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Long Put Vs Long Strangle 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 Strangle strategy. Just remember, you need to be aware of the “right” strike prices for optimal gains.
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.
