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 Protective Call 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 Protective Call 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 Protective Call Vs Long Combo comparison:
| Comparison Aspect | Long Combo | Protective Call |
| 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 | A Protective call combines an existing short position on an underlying asset with buying of call options, to safeguard against the price rise against the expectations...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. | Protective call works as a protection against the price reversal and is like an insurance policy |
| Market Position | Bullish | Bearish |
| Strategy Level Suitable for | Intermediates | Intermediates |
| Options Traded | Put, Call | Call |
| Number of Positions | 2 | 2 |
| Action Needed | Sell One OTM Put, Buy One OTM Call | Short Position on Buy Call Option |
| Risk for You | Unlimited | Limited |
| Profit Potential | Unlimited | Unlimited |
| Break Even Point for Investor | Call Strike + Net Premium | Underlying Price - Call Premium |
| Investor Intention | Low Upfront Investments, High ROI | Protect himself from extra losses if Price goes Up |
| Investor Expectation | Price of Stocks Go Up | Market Prices to Go Down |
| Strategy Summary | Complex | Experience Helps |
| Advantages | Low Upfront Investment, Unlimited Profits | Unlimited Profit, limited Risk |
| Disadvantages | Unlimited Loss, High Premium | Reduced Profits due to the Premium paid for Call Option. |
| Market Scenarios - Profit | 1 | 1 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | NA | Synthetic Long Put |
| More Comparisons | Long Combo Vs Short Put | Protective Call Vs Short Put |
| Long Combo Vs Long Put | Protective Call Vs Long Combo | |
| Long Combo Vs Synthetic Call | Protective Call Vs Synthetic Call | |
| Long Combo Vs Short Call | Protective Call Vs Long Put | |
| Long Combo Vs Long Call | Protective Call Vs Long Call | |
| Long Combo Vs Covered Call | Protective Call Vs Covered Call | |
| Long Combo Vs Covered Put | Protective Call Vs Covered Put | |
| Long Combo Vs Protective Call | Protective Call Vs Short Call | |
| Long Combo Vs Short Box | Protective Call Vs Short Box | |
| Long Combo Vs Long Call Condor | Protective Call Vs Long Call Condor | |
| Long Combo Vs Short Call Condor | Protective Call Vs Short Call Condor | |
| Long Combo Vs Box Spread | Protective Call Vs Box Spread | |
| Long Combo Vs Short Strangle | Protective Call Vs Short Strangle | |
| Long Combo Vs Long Strangle | Protective Call Vs Long Strangle | |
| Long Combo Vs Collar Strategy | Protective Call Vs Collar Strategy | |
| Long Combo Vs Long Straddle | Protective Call Vs Long Straddle | |
| Long Combo Vs Short Straddle | Protective Call Vs Short Straddle | |
| Long Combo Vs Long Call Butterfly | Protective Call Vs Long Call Butterfly | |
| Long Combo Vs Short Call Butterfly | Protective Call Vs Short Call Butterfly | |
| Long Combo Vs Bear Call Spread | Protective Call Vs Bear Call Spread | |
| Long Combo Vs Bear Put Spread | Protective Call Vs Bear Put Spread | |
| Long Combo Vs Bull Call Spread | Protective Call Vs Bull Call Spread | |
| Long Combo Vs Bull Put Spread | Protective Call Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Protective Call Vs Long Combo option strategies.
If you are looking at a bearish market momentum and want to take a limited risk with an eye on unlimited profits, then the protective call is the strategy you must be using.
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.
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.
