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 Synthetic Call 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 Synthetic Call 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 Synthetic Call comparison:
| Comparison Aspect | Short Box | Synthetic Call |
| View |  |  |
| Strategy Introduction | 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 | Synthetic Call is an options strategy in which an underlying asset is combined with a put option to protect against depreciation in the value of the underlying asset. The overall effect is similar to...more |
| Investor Obligation | Recognize Put Call Parity distrubance as soon as possible and take positions to capture the movement. | Stay with the position |
| Market Position | Neutral | Bullish |
| Strategy Level Suitable for | Experts | Beginners |
| Options Traded | 1 Short ITM Call, 1 Long OTM Call, 1 Short ITM Put, 1 Long OTM Put | Put |
| Number of Positions | 4 | 2 (Underlying + Put) |
| Action Needed | Sell bull call spread along with a Bear put spread | Holds a long position in an underlying asset and a put option on the same stock |
| Risk for You | None | Limited |
| Profit Potential | Limited | Unlimited |
| Break Even Point for Investor | Not Required, Almost No Risk/Loss | Underlying Price + Put Premium |
| Investor Intention | Take Positions at the right time and capture the profit. | Save Transaction Costs, Stay Protected from downward market movement. |
| Investor Expectation | Profits generated from the strategy will be enough to compensate for the commissions and brokerages paid | Prices of the Assets to Go Up |
| Strategy Summary | Complicated | Profitable |
| Advantages | No Capital Needed, Zero Risk | Dividends on Stocks, Limited Risk, Unlimited Profit |
| Disadvantages | Low Profit | Chances of loss if the underlying goes down |
| Market Scenarios - Profit | 3 | 1 |
| Market Scenarios - Loss | 0 | 1 |
| Also called as | NA | NA |
| More Comparisons | Short Box Vs Short Put | Synthetic Call Vs Short Put |
| Short Box Vs Long Combo | Synthetic Call Vs Long Combo | |
| Short Box Vs Synthetic Call | Synthetic Call Vs Short Call | |
| Short Box Vs Long Put | Synthetic Call Vs Long Put | |
| Short Box Vs Long Call | Synthetic Call Vs Long Call | |
| Short Box Vs Covered Call | Synthetic Call Vs Covered Call | |
| Short Box Vs Covered Put | Synthetic Call Vs Covered Put | |
| Short Box Vs Protective Call | Synthetic Call Vs Protective Call | |
| Short Box Vs Short Call | Synthetic Call Vs Short Box | |
| Short Box Vs Long Call Condor | Synthetic Call Vs Long Call Condor | |
| Short Box Vs Short Call Condor | Synthetic Call Vs Short Call Condor | |
| Short Box Vs Box Spread | Synthetic Call Vs Box Spread | |
| Short Box Vs Short Strangle | Synthetic Call Vs Short Strangle | |
| Short Box Vs Long Strangle | Synthetic Call Vs Long Strangle | |
| Short Box Vs Collar Strategy | Synthetic Call Vs Collar Strategy | |
| Short Box Vs Long Straddle | Synthetic Call Vs Long Straddle | |
| Short Box Vs Short Straddle | Synthetic Call Vs Short Straddle | |
| Short Box Vs Long Call Butterfly | Synthetic Call Vs Long Call Butterfly | |
| Short Box Vs Short Call Butterfly | Synthetic Call Vs Short Call Butterfly | |
| Short Box Vs Bear Call Spread | Synthetic Call Vs Bear Call Spread | |
| Short Box Vs Bear Put Spread | Synthetic Call Vs Bear Put Spread | |
| Short Box Vs Bull Call Spread | Synthetic Call Vs Bull Call Spread | |
| Short Box Vs Bull Put Spread | Synthetic Call Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Short Box Vs Synthetic Call 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 are looking at a bearish market momentum and are open towards a limited risk with a potential of unlimited profits, then Synthetic Call options strategy is definitely a positive go for you.
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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