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 Short Box 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 Short Box 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 Short Box comparison:
| Comparison Aspect | Short Call | Short Box |
| 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 | 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 | The trader has the obligation to buy the stock at the predetermined price at the time of expiration. | Recognize Put Call Parity distrubance as soon as possible and take positions to capture the movement. |
| Market Position | Bearish | Neutral |
| Strategy Level Suitable for | Experts | Experts |
| Options Traded | Call | 1 Short ITM Call, 1 Long OTM Call, 1 Short ITM Put, 1 Long OTM Put |
| Number of Positions | 1 | 4 |
| Action Needed | Sell Call Option | Sell bull call spread along with a Bear put spread |
| Risk for You | Unlimited | None |
| Profit Potential | Limited | Limited |
| Break Even Point for Investor | Strike Price PLUS 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 | Prices of Assets Go Down Sharply | Profits generated from the strategy will be enough to compensate for the commissions and brokerages paid |
| Strategy Summary | Risky | Complicated |
| Advantages | Profits in Bearish Market | No Capital Needed, Zero Risk |
| Disadvantages | Limited Profit, Unlimited Risk | Low Profit |
| Market Scenarios - Profit | 1 | 3 |
| Market Scenarios - Loss | 1 | 0 |
| Also called as | Naked Call, Uncovered Call | NA |
| More Comparisons | Short Call Vs Short Put | Short Box Vs Short Put |
| Short Call Vs Long Combo | Short Box Vs Long Combo | |
| Short Call Vs Synthetic Call | Short Box Vs Synthetic Call | |
| Short Call Vs Long Put | Short Box Vs Long Put | |
| Short Call Vs Long Call | Short Box Vs Long Call | |
| Short Call Vs Covered Call | Short Box Vs Covered Call | |
| Short Call Vs Covered Put | Short Box Vs Covered Put | |
| Short Call Vs Protective Call | Short Box Vs Protective Call | |
| Short Call Vs Short Box | Short Box Vs Short Call | |
| Short Call Vs Long Call Condor | Short Box Vs Long Call Condor | |
| Short Call Vs Short Call Condor | Short Box Vs Short Call Condor | |
| Short Call Vs Box Spread | Short Box Vs Box Spread | |
| Short Call Vs Short Strangle | Short Box Vs Short Strangle | |
| Short Call Vs Long Strangle | Short Box Vs Long Strangle | |
| Short Call Vs Collar Strategy | Short Box Vs Collar Strategy | |
| Short Call Vs Long Straddle | Short Box Vs Long Straddle | |
| Short Call Vs Short Straddle | Short Box Vs Short Straddle | |
| Short Call Vs Long Call Butterfly | Short Box Vs Long Call Butterfly | |
| Short Call Vs Short Call Butterfly | Short Box Vs Short Call Butterfly | |
| Short Call Vs Bear Call Spread | Short Box Vs Bear Call Spread | |
| Short Call Vs Bear Put Spread | Short Box Vs Bear Put Spread | |
| Short Call Vs Bull Call Spread | Short Box Vs Bull Call Spread | |
| Short Call Vs Bull Put Spread | Short Box Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Short Call Vs Short Box 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 looking at a neutral market or there is not much happening in some of the sectors you are looking to invest in, then Short Box is one optimal option trading strategy for you.
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.
