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 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 Strangle 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 Strangle Vs Long Combo comparison:
| Comparison Aspect | Long Combo | Long Strangle |
| 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 | 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 expects low initial investment, however, the trader needs to pay the premium on the trades irrespective of the trade result. | It is a trend neutral strategy, so the trader does not need to be certain of the direction of the price movement. |
| Market Position | Bullish | Neutral |
| Strategy Level Suitable for | Intermediates | Intermediates |
| Options Traded | Put, Call | Call, Put |
| Number of Positions | 2 | 2 |
| Action Needed | Sell One OTM Put, Buy One OTM Call | One OTM Put, One OTM Call |
| Risk for You | Unlimited | Limited |
| Profit Potential | Unlimited | Unlimited |
| Break Even Point for Investor | Call Strike + Net Premium | Lower Breakeven Point = Strike Price of Put - Net Premium Upper Breakeven Point = Strike Price of Call + Net Premium |
| Investor Intention | Low Upfront Investments, High ROI | Both call and put options expire worthlessly |
| Investor Expectation | Price of Stocks Go Up | Market Shows High Volatility |
| Strategy Summary | Complex | Attractive |
| Advantages | Low Upfront Investment, Unlimited Profits | Less Expensive, Limited Risk, Unlimited Gain |
| Disadvantages | Unlimited Loss, High Premium | Price Movement has to be Big |
| Market Scenarios - Profit | 1 | 2 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | NA | NA |
| More Comparisons | Long Combo Vs Short Put | Long Strangle Vs Short Put |
| Long Combo Vs Long Put | Long Strangle Vs Long Combo | |
| Long Combo Vs Synthetic Call | Long Strangle Vs Synthetic Call | |
| Long Combo Vs Short Call | Long Strangle Vs Long Put | |
| Long Combo Vs Long Call | Long Strangle Vs Long Call | |
| Long Combo Vs Covered Call | Long Strangle Vs Covered Call | |
| Long Combo Vs Covered Put | Long Strangle Vs Covered Put | |
| Long Combo Vs Protective Call | Long Strangle Vs Protective Call | |
| Long Combo Vs Short Box | Long Strangle Vs Short Box | |
| Long Combo Vs Long Call Condor | Long Strangle Vs Long Call Condor | |
| Long Combo Vs Short Call Condor | Long Strangle Vs Short Call Condor | |
| Long Combo Vs Box Spread | Long Strangle Vs Box Spread | |
| Long Combo Vs Short Strangle | Long Strangle Vs Short Strangle | |
| Long Combo Vs Long Strangle | Long Strangle Vs Short Call | |
| Long Combo Vs Collar Strategy | Long Strangle Vs Collar Strategy | |
| Long Combo Vs Long Straddle | Long Strangle Vs Long Straddle | |
| Long Combo Vs Short Straddle | Long Strangle Vs Short Straddle | |
| Long Combo Vs Long Call Butterfly | Long Strangle Vs Long Call Butterfly | |
| Long Combo Vs Short Call Butterfly | Long Strangle Vs Short Call Butterfly | |
| Long Combo Vs Bear Call Spread | Long Strangle Vs Bear Call Spread | |
| Long Combo Vs Bear Put Spread | Long Strangle Vs Bear Put Spread | |
| Long Combo Vs Bull Call Spread | Long Strangle Vs Bull Call Spread | |
| Long Combo Vs Bull Put Spread | Long Strangle Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Long Strangle Vs Long Combo 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.
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.
