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 Call Butterfly Vs Box Spread 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 Call Butterfly Vs Box Spread 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 Call Butterfly Vs Box Spread comparison:
| Comparison Aspect | Short Call Butterfly | Box Spread |
| 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 | Box Spread is an arbitrage strategy in which two complementary positions are taken that balance out the risk of each other. This makes the box spread an almost risk-free strategy...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. | The trader has the obligation to keep the positions open till they reach their respective expirations. |
| Market Position | Neutral | Neutral |
| Strategy Level Suitable for | Intermediates | Intermediates |
| Options Traded | Call | Call, Put |
| Number of Positions | 4 | 4 |
| Action Needed | 2 ATM, 1 ITM, 1 OTM Calls | 1 Long ITM Call, 1 Short OTM Call, 1 Long ITM Put, 1 Short OTM Put |
| 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 | NA |
| Investor Intention | Let Options Expire Worthlessly | Choose the Correct Stike Prices |
| Investor Expectation | High Market Volatility | Short-term demand shifts of the options in the market. |
| Strategy Summary | Profit in Unsure Market Situations | Complicated |
| Advantages | Limited Exposure, Low Investment | Risk Free, Direction Neutral |
| Disadvantages | Low Returns, Requires Significant Market Movement | Limited Profit, High Margin Maintenance, Positions cannot be closed before expiry. |
| Market Scenarios - Profit | 1 | 2 |
| Market Scenarios - Loss | 1 | 0 |
| Also called as | NA | NA |
| More Comparisons | Short Call Butterfly Vs Short Put | Box Spread Vs Short Put |
| Short Call Butterfly Vs Long Combo | Box Spread Vs Long Combo | |
| Short Call Butterfly Vs Synthetic Call | Box Spread Vs Synthetic Call | |
| Short Call Butterfly Vs Long Put | Box Spread Vs Long Put | |
| Short Call Butterfly Vs Long Call | Box Spread Vs Long Call | |
| Short Call Butterfly Vs Covered Call | Box Spread Vs Covered Call | |
| Short Call Butterfly Vs Covered Put | Box Spread Vs Covered Put | |
| Short Call Butterfly Vs Protective Call | Box Spread Vs Protective Call | |
| Short Call Butterfly Vs Short Box | Box Spread Vs Short Box | |
| Short Call Butterfly Vs Long Call Condor | Box Spread Vs Long Call Condor | |
| Short Call Butterfly Vs Short Call Condor | Box Spread Vs Short Call Condor | |
| Short Call Butterfly Vs Box Spread | Box Spread Vs Short Call | |
| Short Call Butterfly Vs Short Strangle | Box Spread Vs Short Strangle | |
| Short Call Butterfly Vs Long Strangle | Box Spread Vs Long Strangle | |
| Short Call Butterfly Vs Collar Strategy | Box Spread Vs Collar Strategy | |
| Short Call Butterfly Vs Long Straddle | Box Spread Vs Long Straddle | |
| Short Call Butterfly Vs Short Straddle | Box Spread Vs Short Straddle | |
| Short Call Butterfly Vs Long Call Butterfly | Box Spread Vs Long Call Butterfly | |
| Short Call Butterfly Vs Short Call | Box Spread Vs Short Call Butterfly | |
| Short Call Butterfly Vs Bear Call Spread | Box Spread Vs Bear Call Spread | |
| Short Call Butterfly Vs Bear Put Spread | Box Spread Vs Bear Put Spread | |
| Short Call Butterfly Vs Bull Call Spread | Box Spread Vs Bull Call Spread | |
| Short Call Butterfly Vs Bull Put Spread | Box Spread Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Short Call Butterfly Vs Box Spread option strategies.
Furthermore, 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, if you are in a neutral market situation and are looking for consistent but limited profits for your share market trades, then you can opt to go for the Box spread strategy.
Furthermore, as told above, it also depends on the market situation.
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