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 Strangle 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 Strangle 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 Strangle comparison:
| Comparison Aspect | Long Strangle | Short Box |
| 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 | 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 | It is a trend neutral strategy, so the trader does not need to be certain of the direction of the price 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 | Intermediates | 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 | One OTM Put, One OTM Call | 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 Point = Strike Price of Put - Net Premium Upper Breakeven Point = Strike Price of Call + Net Premium | Not Required, Almost No Risk/Loss |
| Investor Intention | Both call and put options expire worthlessly | Take Positions at the right time and capture the profit. |
| Investor Expectation | Market Shows High Volatility | Profits generated from the strategy will be enough to compensate for the commissions and brokerages paid |
| Strategy Summary | Attractive | Complicated |
| Advantages | Less Expensive, Limited Risk, Unlimited Gain | No Capital Needed, Zero Risk |
| Disadvantages | Price Movement has to be Big | Low Profit |
| Market Scenarios - Profit | 2 | 3 |
| Market Scenarios - Loss | 1 | 0 |
| Also called as | NA | NA |
| More Comparisons | Long Strangle Vs Short Put | Short Box Vs Short Put |
| Long Strangle Vs Long Combo | Short Box Vs Long Combo | |
| Long Strangle Vs Synthetic Call | Short Box Vs Synthetic Call | |
| Long Strangle Vs Long Put | Short Box Vs Long Put | |
| Long Strangle Vs Long Call | Short Box Vs Long Call | |
| Long Strangle Vs Covered Call | Short Box Vs Covered Call | |
| Long Strangle Vs Covered Put | Short Box Vs Covered Put | |
| Long Strangle Vs Protective Call | Short Box Vs Protective Call | |
| Long Strangle Vs Short Box | Short Box Vs Short Call | |
| Long Strangle Vs Long Call Condor | Short Box Vs Long Call Condor | |
| Long Strangle Vs Short Call Condor | Short Box Vs Short Call Condor | |
| Long Strangle Vs Box Spread | Short Box Vs Box Spread | |
| Long Strangle Vs Short Strangle | Short Box Vs Short Strangle | |
| Long Strangle Vs Short Call | Short Box Vs Long Strangle | |
| Long Strangle Vs Collar Strategy | Short Box Vs Collar Strategy | |
| Long Strangle Vs Long Straddle | Short Box Vs Long Straddle | |
| Long Strangle Vs Short Straddle | Short Box Vs Short Straddle | |
| Long Strangle Vs Long Call Butterfly | Short Box Vs Long Call Butterfly | |
| Long Strangle Vs Short Call Butterfly | Short Box Vs Short Call Butterfly | |
| Long Strangle Vs Bear Call Spread | Short Box Vs Bear Call Spread | |
| Long Strangle Vs Bear Put Spread | Short Box Vs Bear Put Spread | |
| Long Strangle Vs Bull Call Spread | Short Box Vs Bull Call Spread | |
| Long Strangle Vs Bull Put Spread | Short Box Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Short Box Vs Long Strangle 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.
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.
