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 Short 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 Short 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 Short Call Butterfly comparison:
| Comparison Aspect | Short Call Butterfly | Short Box |
| View |  |  |
| Strategy Introduction | Short Call Butterfly is the options strategy which is used when the trader expects a lot of volatility in the market. It is the opposite of the long call butterfly, in which the investor expects...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 necessary that the strike prices of the in-the-money and out-of-the-money call options are equidistant from the at-the-money call options, and all the options have the same expiration date. | 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 | Let Options Expire Worthlessly | Take Positions at the right time and capture the profit. |
| Investor Expectation | High Market Volatility | Profits generated from the strategy will be enough to compensate for the commissions and brokerages paid |
| Strategy Summary | Profit in Unsure Market Situations | Complicated |
| Advantages | Limited Exposure, Low Investment | No Capital Needed, Zero Risk |
| Disadvantages | Low Returns, Requires Significant Market Movement | Low Profit |
| Market Scenarios - Profit | 1 | 3 |
| Market Scenarios - Loss | 1 | 0 |
| Also called as | NA | NA |
| More Comparisons | Short Call Butterfly Vs Short Put | Short Box Vs Short Put |
| Short Call Butterfly Vs Long Combo | Short Box Vs Long Combo | |
| Short Call Butterfly Vs Synthetic Call | Short Box Vs Synthetic Call | |
| Short Call Butterfly Vs Long Put | Short Box Vs Long Put | |
| Short Call Butterfly Vs Long Call | Short Box Vs Long Call | |
| Short Call Butterfly Vs Covered Call | Short Box Vs Covered Call | |
| Short Call Butterfly Vs Covered Put | Short Box Vs Covered Put | |
| Short Call Butterfly Vs Protective Call | Short Box Vs Protective Call | |
| Short Call Butterfly Vs Short Box | Short Box Vs Short Call | |
| Short Call Butterfly Vs Long Call Condor | Short Box Vs Long Call Condor | |
| Short Call Butterfly Vs Short Call Condor | Short Box Vs Short Call Condor | |
| Short Call Butterfly Vs Box Spread | Short Box Vs Box Spread | |
| Short Call Butterfly Vs Short Strangle | Short Box Vs Short Strangle | |
| Short Call Butterfly Vs Long Strangle | Short Box Vs Long Strangle | |
| Short Call Butterfly Vs Collar Strategy | Short Box Vs Collar Strategy | |
| Short Call Butterfly Vs Long Straddle | Short Box Vs Long Straddle | |
| Short Call Butterfly Vs Short Straddle | Short Box Vs Short Straddle | |
| Short Call Butterfly Vs Long Call Butterfly | Short Box Vs Long Call Butterfly | |
| Short Call Butterfly Vs Short Call | Short Box Vs Short Call Butterfly | |
| Short Call Butterfly Vs Bear Call Spread | Short Box Vs Bear Call Spread | |
| Short Call Butterfly Vs Bear Put Spread | Short Box Vs Bear Put Spread | |
| Short Call Butterfly Vs Bull Call Spread | Short Box Vs Bull Call Spread | |
| Short Call Butterfly Vs Bull Put Spread | Short Box Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Short Box Vs Short Call Butterfly option strategies.
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.
At the same time, if you as a trader are expecting price movement (without any idea of the direction) within a neutral market momentum – then short call butterfly is an optimal strategy for you.
There is a limited amount of risk involved and you can expect limited profit only in this options strategy.
At the same time, be aware of all the related aspects (like the ones listed above) and then make a choice for yourself.
Furthermore, as said above, it also depends on the market situation.
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