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 Strangle Vs Box Spread 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 Strangle Vs Box Spread 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 Strangle Vs Box Spread comparison:
| Comparison Aspect | Long Strangle | Box Spread |
| View |  |  |
| Strategy Introduction | 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 | Box Spread is an arbitrage strategy in which two complementary positions are taken that balance out the risk of each other. This makes the box spread an almost risk-free strategy...more |
| Investor Obligation | It is a trend neutral strategy, so the trader does not need to be certain of the direction of the price movement. | The trader has the obligation to keep the positions open till they reach their respective expirations. |
| Market Position | Neutral | Neutral |
| Strategy Level Suitable for | Intermediates | Intermediates |
| Options Traded | Call, Put | Call, Put |
| Number of Positions | 2 | 4 |
| Action Needed | One OTM Put, One OTM Call | 1 Long ITM Call, 1 Short OTM Call, 1 Long ITM Put, 1 Short OTM Put |
| Risk for You | Limited | None |
| Profit Potential | Unlimited | Limited |
| Break Even Point for Investor | Lower Breakeven Point = Strike Price of Put - Net Premium Upper Breakeven Point = Strike Price of Call + Net Premium | NA |
| Investor Intention | Both call and put options expire worthlessly | Choose the Correct Stike Prices |
| Investor Expectation | Market Shows High Volatility | Short-term demand shifts of the options in the market. |
| Strategy Summary | Attractive | Complicated |
| Advantages | Less Expensive, Limited Risk, Unlimited Gain | Risk Free, Direction Neutral |
| Disadvantages | Price Movement has to be Big | Limited Profit, High Margin Maintenance, Positions cannot be closed before expiry. |
| Market Scenarios - Profit | 2 | 2 |
| Market Scenarios - Loss | 1 | 0 |
| Also called as | NA | NA |
| More Comparisons | Long Strangle Vs Short Put | Box Spread Vs Short Put |
| Long Strangle Vs Long Combo | Box Spread Vs Long Combo | |
| Long Strangle Vs Synthetic Call | Box Spread Vs Synthetic Call | |
| Long Strangle Vs Long Put | Box Spread Vs Long Put | |
| Long Strangle Vs Long Call | Box Spread Vs Long Call | |
| Long Strangle Vs Covered Call | Box Spread Vs Covered Call | |
| Long Strangle Vs Covered Put | Box Spread Vs Covered Put | |
| Long Strangle Vs Protective Call | Box Spread Vs Protective Call | |
| Long Strangle Vs Short Box | Box Spread Vs Short Box | |
| Long Strangle Vs Long Call Condor | Box Spread Vs Long Call Condor | |
| Long Strangle Vs Short Call Condor | Box Spread Vs Short Call Condor | |
| Long Strangle Vs Box Spread | Box Spread Vs Short Call | |
| Long Strangle Vs Short Strangle | Box Spread Vs Short Strangle | |
| Long Strangle Vs Short Call | Box Spread Vs Long Strangle | |
| Long Strangle Vs Collar Strategy | Box Spread Vs Collar Strategy | |
| Long Strangle Vs Long Straddle | Box Spread Vs Long Straddle | |
| Long Strangle Vs Short Straddle | Box Spread Vs Short Straddle | |
| Long Strangle Vs Long Call Butterfly | Box Spread Vs Long Call Butterfly | |
| Long Strangle Vs Short Call Butterfly | Box Spread Vs Short Call Butterfly | |
| Long Strangle Vs Bear Call Spread | Box Spread Vs Bear Call Spread | |
| Long Strangle Vs Bear Put Spread | Box Spread Vs Bear Put Spread | |
| Long Strangle Vs Bull Call Spread | Box Spread Vs Bull Call Spread | |
| Long Strangle Vs Bull Put Spread | Box Spread Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Long Strangle Vs Box Spread option strategies.
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, if you are in a neutral market situation and are looking for consistent but limited profits for your share market trades, then you can opt to go for the Box spread strategy.
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.
