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 Short Box 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 Short Box 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 Short Box comparison:
| Comparison Aspect | Long Put | Short Box |
| 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 | Short Box involves selling a bull call spread along with a bear put spread, both at the same strike prices and expiration date, so that both the spreads balance each other out and create an arbitrage...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. | Recognize Put Call Parity distrubance as soon as possible and take positions to capture the movement. |
| Market Position | Bearish | Neutral |
| Strategy Level Suitable for | Beginners | Experts |
| Options Traded | Put | 1 Short ITM Call, 1 Long OTM Call, 1 Short ITM Put, 1 Long OTM Put |
| Number of Positions | 1 | 4 |
| Action Needed | Buy Put Option | Sell bull call spread along with a Bear put spread |
| Risk for You | Limited | None |
| Profit Potential | Unlimited | Limited |
| Break Even Point for Investor | Strike Price MINUS Premium | Not Required, Almost No Risk/Loss |
| Investor Intention | Let Options Expire Worthlessly | Take Positions at the right time and capture the profit. |
| Investor Expectation | Prices of Assets Go Down | Profits generated from the strategy will be enough to compensate for the commissions and brokerages paid |
| Strategy Summary | Effective | Complicated |
| Advantages | Unlimited Profits, Profits possible even in Bearish Market | No Capital Needed, Zero Risk |
| Disadvantages | High Premium | Low Profit |
| Market Scenarios - Profit | 2 | 3 |
| Market Scenarios - Loss | 1 | 0 |
| Also called as | NA | NA |
| More Comparisons | Long Put Vs Short Put | Short Box Vs Short Put |
| Long Put Vs Long Combo | Short Box Vs Long Combo | |
| Long Put Vs Synthetic Call | Short Box Vs Synthetic Call | |
| Long Put Vs Short Call | Short Box Vs Long Put | |
| Long Put Vs Long Call | Short Box Vs Long Call | |
| Long Put Vs Covered Call | Short Box Vs Covered Call | |
| Long Put Vs Covered Put | Short Box Vs Covered Put | |
| Long Put Vs Protective Call | Short Box Vs Protective Call | |
| Long Put Vs Short Box | Short Box Vs Short Call | |
| Long Put Vs Long Call Condor | Short Box Vs Long Call Condor | |
| Long Put Vs Short Call Condor | Short Box Vs Short Call Condor | |
| Long Put Vs Box Spread | Short Box Vs Box Spread | |
| Long Put Vs Short Strangle | Short Box Vs Short Strangle | |
| Long Put Vs Long Strangle | Short Box Vs Long Strangle | |
| Long Put Vs Collar Strategy | Short Box Vs Collar Strategy | |
| Long Put Vs Long Straddle | Short Box Vs Long Straddle | |
| Long Put Vs Short Straddle | Short Box Vs Short Straddle | |
| Long Put Vs Long Call Butterfly | Short Box Vs Long Call Butterfly | |
| Long Put Vs Short Call Butterfly | Short Box Vs Short Call Butterfly | |
| Long Put Vs Bear Call Spread | Short Box Vs Bear Call Spread | |
| Long Put Vs Bear Put Spread | Short Box Vs Bear Put Spread | |
| Long Put Vs Bull Call Spread | Short Box Vs Bull Call Spread | |
| Long Put Vs Bull Put Spread | Short Box Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Long Put Vs Short Box 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 looking at a neutral market or there is not much happening in some of the sectors you are looking to invest in, then Short Box is one optimal option trading strategy for you.
Remember, the Short box strategy has no risk but provides a consistent (and limited) profits to your trades. To add to that, it is a relatively complex strategy too.
Furthermore, as said above, it also depends on the market situation.
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