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 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 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 Vs Box Spread comparison:
| Comparison Aspect | Short Call | Box Spread |
| View |  |  |
| Strategy Introduction | Short Call is used when the trader expects that the price of the underlying asset will go down sharply, he shorts a call. If the price of the asset goes down, the strategy generates profit. However, if the price...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 | The trader has the obligation to buy the stock at the predetermined price at the time of expiration. | The trader has the obligation to keep the positions open till they reach their respective expirations. |
| Market Position | Bearish | Neutral |
| Strategy Level Suitable for | Experts | Intermediates |
| Options Traded | Call | Call, Put |
| Number of Positions | 1 | 4 |
| Action Needed | Sell Call Option | 1 Long ITM Call, 1 Short OTM Call, 1 Long ITM Put, 1 Short OTM Put |
| Risk for You | Unlimited | None |
| Profit Potential | Limited | Limited |
| Break Even Point for Investor | Strike Price PLUS Premium | NA |
| Investor Intention | Let Options Expire Worthlessly | Choose the Correct Stike Prices |
| Investor Expectation | Prices of Assets Go Down Sharply | Short-term demand shifts of the options in the market. |
| Strategy Summary | Risky | Complicated |
| Advantages | Profits in Bearish Market | Risk Free, Direction Neutral |
| Disadvantages | Limited Profit, Unlimited Risk | Limited Profit, High Margin Maintenance, Positions cannot be closed before expiry. |
| Market Scenarios - Profit | 1 | 2 |
| Market Scenarios - Loss | 1 | 0 |
| Also called as | Naked Call, Uncovered Call | NA |
| More Comparisons | Short Call Vs Short Put | Box Spread Vs Short Put |
| Short Call Vs Long Combo | Box Spread Vs Long Combo | |
| Short Call Vs Synthetic Call | Box Spread Vs Synthetic Call | |
| Short Call Vs Long Put | Box Spread Vs Long Put | |
| Short Call Vs Long Call | Box Spread Vs Long Call | |
| Short Call Vs Covered Call | Box Spread Vs Covered Call | |
| Short Call Vs Covered Put | Box Spread Vs Covered Put | |
| Short Call Vs Protective Call | Box Spread Vs Protective Call | |
| Short Call Vs Short Box | Box Spread Vs Short Box | |
| Short Call Vs Long Call Condor | Box Spread Vs Long Call Condor | |
| Short Call Vs Short Call Condor | Box Spread Vs Short Call Condor | |
| Short Call Vs Box Spread | Box Spread Vs Short Call | |
| Short Call Vs Short Strangle | Box Spread Vs Short Strangle | |
| Short Call Vs Long Strangle | Box Spread Vs Long Strangle | |
| Short Call Vs Collar Strategy | Box Spread Vs Collar Strategy | |
| Short Call Vs Long Straddle | Box Spread Vs Long Straddle | |
| Short Call Vs Short Straddle | Box Spread Vs Short Straddle | |
| Short Call Vs Long Call Butterfly | Box Spread Vs Long Call Butterfly | |
| Short Call Vs Short Call Butterfly | Box Spread Vs Short Call Butterfly | |
| Short Call Vs Bear Call Spread | Box Spread Vs Bear Call Spread | |
| Short Call Vs Bear Put Spread | Box Spread Vs Bear Put Spread | |
| Short Call Vs Bull Call Spread | Box Spread Vs Bull Call Spread | |
| Short Call Vs Bull Put Spread | Box Spread Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Short Call Vs Box Spread option strategies.
As mentioned above, if you are looking to put minimal initial investment and have a high-risk appetite, then Short Call options strategy can work wonders for you.
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 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.
