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 Straddle 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 Straddle 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 Straddle comparison:
| Comparison Aspect | Long Straddle | Short Box |
| View |  |  |
| Strategy Introduction | 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 | 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 | 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. | Recognize Put Call Parity distrubance as soon as possible and take positions to capture the movement. |
| Market Position | Neutral | Neutral |
| Strategy Level Suitable for | Beginners | Experts |
| Options Traded | Call, Put | 1 Short ITM Call, 1 Long OTM Call, 1 Short ITM Put, 1 Long OTM Put |
| Number of Positions | 2 | 4 |
| Action Needed | 1 ATM Call, 1 ATM Put | Sell bull call spread along with a Bear put spread |
| Risk for You | Limited | None |
| Profit Potential | Unlimited | Limited |
| Break Even Point for Investor | Lower Breakeven = Strike Price of Put - Net Premium Upper breakeven = Strike Price of Call + Net Premium | Not Required, Almost No Risk/Loss |
| Investor Intention | Put & Call Options Expire Worthlessly | Take Positions at the right time and capture the profit. |
| Investor Expectation | Sharp Market Movement | Profits generated from the strategy will be enough to compensate for the commissions and brokerages paid |
| Strategy Summary | Excellent & Simple | Complicated |
| Advantages | Uni-Directional Profit, Unlimited Gains | No Capital Needed, Zero Risk |
| Disadvantages | High Premium | Low Profit |
| Market Scenarios - Profit | 1 | 3 |
| Market Scenarios - Loss | 1 | 0 |
| Also called as | NA | NA |
| More Comparisons | Long Straddle Vs Short Put | Short Box Vs Short Put |
| Long Straddle Vs Long Combo | Short Box Vs Long Combo | |
| Long Straddle Vs Synthetic Call | Short Box Vs Synthetic Call | |
| Long Straddle Vs Long Put | Short Box Vs Long Put | |
| Long Straddle Vs Long Call | Short Box Vs Long Call | |
| Long Straddle Vs Covered Call | Short Box Vs Covered Call | |
| Long Straddle Vs Covered Put | Short Box Vs Covered Put | |
| Long Straddle Vs Protective Call | Short Box Vs Protective Call | |
| Long Straddle Vs Short Box | Short Box Vs Short Call | |
| Long Straddle Vs Long Call Condor | Short Box Vs Long Call Condor | |
| Long Straddle Vs Short Call Condor | Short Box Vs Short Call Condor | |
| Long Straddle Vs Box Spread | Short Box Vs Box Spread | |
| Long Straddle Vs Short Strangle | Short Box Vs Short Strangle | |
| Long Straddle Vs Long Strangle | Short Box Vs Long Strangle | |
| Long Straddle Vs Collar Strategy | Short Box Vs Collar Strategy | |
| Long Straddle Vs Short Call | Short Box Vs Long Straddle | |
| Long Straddle Vs Short Straddle | Short Box Vs Short Straddle | |
| Long Straddle Vs Long Call Butterfly | Short Box Vs Long Call Butterfly | |
| Long Straddle Vs Short Call Butterfly | Short Box Vs Short Call Butterfly | |
| Long Straddle Vs Bear Call Spread | Short Box Vs Bear Call Spread | |
| Long Straddle Vs Bear Put Spread | Short Box Vs Bear Put Spread | |
| Long Straddle Vs Bull Put Spread | Short Box Vs Bull Call Spread | |
| Long Straddle Vs Bull Put Spread | Short Box Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Short Box Vs Long Straddle 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 Straddle strategy.
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.
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.
