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 Short Box Vs Long Call Butterfly 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 Short Box Vs Long Call Butterfly 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 Short Box Vs Long Call Butterfly comparison:
| Comparison Aspect | Long Call Butterfly | Short Box |
| View |  |  |
| Strategy Introduction | Long Call Butterfly is the options trading strategy which is used when the trader has a neutral outlook towards the market and expects the prices to remain range-bound...more | Short Box involves selling a bull call spread along with a bear put spread, both at the same strike prices and expiration date, so that both the spreads balance each other out and create an arbitrage...more |
| Investor Obligation | Create Bull Spread when High Market Expectations, Create Bear Spread when Low Market Expectations. | Recognize Put Call Parity distrubance as soon as possible and take positions to capture the movement. |
| Market Position | Neutral | Neutral |
| Strategy Level Suitable for | Intermediates | Experts |
| Options Traded | Call | 1 Short ITM Call, 1 Long OTM Call, 1 Short ITM Put, 1 Long OTM Put |
| Number of Positions | 4 | 4 |
| Action Needed | 2 ATM, 1 ITM, 1 OTM Calls | Sell bull call spread along with a Bear put spread |
| Risk for You | Limited | None |
| Profit Potential | Limited | Limited |
| Break Even Point for Investor | Lower Break-even = Lower Strike Price + Net Premium Upper Break-even = Higher Strike Price - Net Premium | Not Required, Almost No Risk/Loss |
| Investor Intention | Options expire worthless except the one with the lower strike price | Take Positions at the right time and capture the profit. |
| Investor Expectation | No Movement in Price of the Underlying Asset | Profits generated from the strategy will be enough to compensate for the commissions and brokerages paid |
| Strategy Summary | Effective | Complicated |
| Advantages | Profits in Low Market Volatility, Limited Risks | No Capital Needed, Zero Risk |
| Disadvantages | Limited Profit, High Premium | Low Profit |
| Market Scenarios - Profit | 1 | 3 |
| Market Scenarios - Loss | 1 | 0 |
| Also called as | NA | NA |
| More Comparisons | Long Call Butterfly Vs Short Put | Short Box Vs Short Put |
| Long Call Butterfly Vs Long Combo | Short Box Vs Long Combo | |
| Long Call Butterfly Vs Synthetic Call | Short Box Vs Synthetic Call | |
| Long Call Butterfly Vs Long Put | Short Box Vs Long Put | |
| Long Call Butterfly Vs Long Call | Short Box Vs Long Call | |
| Long Call Butterfly Vs Covered Call | Short Box Vs Covered Call | |
| Long Call Butterfly Vs Covered Put | Short Box Vs Covered Put | |
| Long Call Butterfly Vs Protective Call | Short Box Vs Protective Call | |
| Long Call Butterfly Vs Short Box | Short Box Vs Short Call | |
| Long Call Butterfly Vs Long Call Condor | Short Box Vs Long Call Condor | |
| Long Call Butterfly Vs Short Call Condor | Short Box Vs Short Call Condor | |
| Long Call Butterfly Vs Box Spread | Short Box Vs Box Spread | |
| Long Call Butterfly Vs Short Strangle | Short Box Vs Short Strangle | |
| Long Call Butterfly Vs Long Strangle | Short Box Vs Long Strangle | |
| Long Call Butterfly Vs Collar Strategy | Short Box Vs Collar Strategy | |
| Long Call Butterfly Vs Long Straddle | Short Box Vs Long Straddle | |
| Long Call Butterfly Vs Short Straddle | Short Box Vs Short Straddle | |
| Long Call Butterfly Vs Short Call | Short Box Vs Long Call Butterfly | |
| Long Call Butterfly Vs Short Call Butterfly | Short Box Vs Short Call Butterfly | |
| Long Call Butterfly Vs Bear Call Spread | Short Box Vs Bear Call Spread | |
| Long Call Butterfly Vs Bear Put Spread | Short Box Vs Bear Put Spread | |
| Long Call Butterfly Vs Bull Call Spread | Short Box Vs Bull Call Spread | |
| Long Call Butterfly Vs Bull Put Spread | Short Box Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Short Box Vs Long Call Butterfly option strategies.
At the same time, if you are in a neutral market situation and want to take a limited risk, then Long Call Butterfly is one of the options trading strategies you can look out for.
The profit you get using this strategy is also limited in scope.
Remember, the Short box strategy has no risk but provides a consistent (and limited) profits to your trades. To add to that, it is a relatively complex strategy too.
Furthermore, as said above, it also depends on the market situation.
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