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 Synthetic 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 Synthetic 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 Synthetic Call comparison:
| Comparison Aspect | Long Put | Synthetic 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 | Synthetic Call is an options strategy in which an underlying asset is combined with a put option to protect against depreciation in the value of the underlying asset. The overall effect is similar to...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. | Stay with the position |
| Market Position | Bearish | Bullish |
| Strategy Level Suitable for | Beginners | Beginners |
| Options Traded | Put | Put |
| Number of Positions | 1 | 2 (Underlying + Put) |
| Action Needed | Buy Put Option | Holds a long position in an underlying asset and a put option on the same stock |
| Risk for You | Limited | Limited |
| Profit Potential | Unlimited | Unlimited |
| Break Even Point for Investor | Strike Price MINUS Premium | Underlying Price + Put Premium |
| Investor Intention | Let Options Expire Worthlessly | Save Transaction Costs, Stay Protected from downward market movement. |
| Investor Expectation | Prices of Assets Go Down | Prices of the Assets to Go Up |
| Strategy Summary | Effective | Profitable |
| Advantages | Unlimited Profits, Profits possible even in Bearish Market | Dividends on Stocks, Limited Risk, Unlimited Profit |
| Disadvantages | High Premium | Chances of loss if the underlying goes down |
| Market Scenarios - Profit | 2 | 1 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | NA | NA |
| More Comparisons | Long Put Vs Short Put | Synthetic Call Vs Short Put |
| Long Put Vs Long Combo | Synthetic Call Vs Long Combo | |
| Long Put Vs Synthetic Call | Synthetic Call Vs Short Call | |
| Long Put Vs Short Call | Synthetic Call Vs Long Put | |
| Long Put Vs Long Call | Synthetic Call Vs Long Call | |
| Long Put Vs Covered Call | Synthetic Call Vs Covered Call | |
| Long Put Vs Covered Put | Synthetic Call Vs Covered Put | |
| Long Put Vs Protective Call | Synthetic Call Vs Protective Call | |
| Long Put Vs Short Box | Synthetic Call Vs Short Box | |
| Long Put Vs Long Call Condor | Synthetic Call Vs Long Call Condor | |
| Long Put Vs Short Call Condor | Synthetic Call Vs Short Call Condor | |
| Long Put Vs Box Spread | Synthetic Call Vs Box Spread | |
| Long Put Vs Short Strangle | Synthetic Call Vs Short Strangle | |
| Long Put Vs Long Strangle | Synthetic Call Vs Long Strangle | |
| Long Put Vs Collar Strategy | Synthetic Call Vs Collar Strategy | |
| Long Put Vs Long Straddle | Synthetic Call Vs Long Straddle | |
| Long Put Vs Short Straddle | Synthetic Call Vs Short Straddle | |
| Long Put Vs Long Call Butterfly | Synthetic Call Vs Long Call Butterfly | |
| Long Put Vs Short Call Butterfly | Synthetic Call Vs Short Call Butterfly | |
| Long Put Vs Bear Call Spread | Synthetic Call Vs Bear Call Spread | |
| Long Put Vs Bear Put Spread | Synthetic Call Vs Bear Put Spread | |
| Long Put Vs Bull Call Spread | Synthetic Call Vs Bull Call Spread | |
| Long Put Vs Bull Put Spread | Synthetic Call Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Long Put Vs Synthetic 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 looking at a bearish market momentum and are open towards a limited risk with a potential of unlimited profits, then Synthetic Call options strategy is definitely a positive go for you.
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.
