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 Straddle Vs Long Combo 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 Straddle Vs Long Combo 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 Straddle Vs Long Combo comparison:
| Comparison Aspect | Long Combo | Long Straddle |
| View |  |  |
| Strategy Introduction | The long combo is used when the investor is bullish towards the market and is certain that the prices of the shares will go up...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 expects low initial investment, however, the trader needs to pay the premium on the trades irrespective of the trade result. | 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 | Bullish | Neutral |
| Strategy Level Suitable for | Intermediates | Beginners |
| Options Traded | Put, Call | Call, Put |
| Number of Positions | 2 | 2 |
| Action Needed | Sell One OTM Put, Buy One OTM Call | 1 ATM Call, 1 ATM Put |
| Risk for You | Unlimited | Limited |
| Profit Potential | Unlimited | Unlimited |
| Break Even Point for Investor | Call Strike + Net Premium | Lower Breakeven = Strike Price of Put - Net Premium Upper breakeven = Strike Price of Call + Net Premium |
| Investor Intention | Low Upfront Investments, High ROI | Put & Call Options Expire Worthlessly |
| Investor Expectation | Price of Stocks Go Up | Sharp Market Movement |
| Strategy Summary | Complex | Excellent & Simple |
| Advantages | Low Upfront Investment, Unlimited Profits | Uni-Directional Profit, Unlimited Gains |
| Disadvantages | Unlimited Loss, High Premium | High Premium |
| Market Scenarios - Profit | 1 | 1 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | NA | NA |
| More Comparisons | Long Combo Vs Short Put | Long Straddle Vs Short Put |
| Long Combo Vs Long Put | Long Straddle Vs Long Combo | |
| Long Combo Vs Synthetic Call | Long Straddle Vs Synthetic Call | |
| Long Combo Vs Short Call | Long Straddle Vs Long Put | |
| Long Combo Vs Long Call | Long Straddle Vs Long Call | |
| Long Combo Vs Covered Call | Long Straddle Vs Covered Call | |
| Long Combo Vs Covered Put | Long Straddle Vs Covered Put | |
| Long Combo Vs Protective Call | Long Straddle Vs Protective Call | |
| Long Combo Vs Short Box | Long Straddle Vs Short Box | |
| Long Combo Vs Long Call Condor | Long Straddle Vs Long Call Condor | |
| Long Combo Vs Short Call Condor | Long Straddle Vs Short Call Condor | |
| Long Combo Vs Box Spread | Long Straddle Vs Box Spread | |
| Long Combo Vs Short Strangle | Long Straddle Vs Short Strangle | |
| Long Combo Vs Long Strangle | Long Straddle Vs Long Strangle | |
| Long Combo Vs Collar Strategy | Long Straddle Vs Collar Strategy | |
| Long Combo Vs Long Straddle | Long Straddle Vs Short Call | |
| Long Combo Vs Short Straddle | Long Straddle Vs Short Straddle | |
| Long Combo Vs Long Call Butterfly | Long Straddle Vs Long Call Butterfly | |
| Long Combo Vs Short Call Butterfly | Long Straddle Vs Short Call Butterfly | |
| Long Combo Vs Bear Call Spread | Long Straddle Vs Bear Call Spread | |
| Long Combo Vs Bear Put Spread | Long Straddle Vs Bear Put Spread | |
| Long Combo Vs Bull Call Spread | Long Straddle Vs Bull Put Spread | |
| Long Combo Vs Bull Put Spread | Long Straddle Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Long Straddle Vs Long Combo option strategies.
However, 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.
If you are looking to put minimal initial investment and are open for unlimited profits as well as risks, then Long Combo options strategy can work wonders for you.
Furthermore, as told 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.
