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 Strangle 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 Strangle 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 Strangle comparison:
| Comparison Aspect | Short Call | Short Strangle |
| 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 | The short strangle options trading strategy is an excellent strategy to be deployed when the investor is expecting little to no volatility in the market...more |
| Investor Obligation | The trader has the obligation to buy the stock at the predetermined price at the time of expiration. | If the prediction does not come out true, the strategy can cause unlimited loss. |
| Market Position | Bearish | Neutral |
| Strategy Level Suitable for | Experts | Experts |
| Options Traded | Call | Call |
| Number of Positions | 1 | 4 |
| Action Needed | Sell Call Option | 1 Short ITM Call, 1 Long ITM Call, 1 Long OTM Call, 1 Short OTM Call |
| Risk for You | Unlimited | Limited |
| Profit Potential | Limited | Unlimited |
| Break Even Point for Investor | Strike Price PLUS Premium | Lower Breakeven = Lower Strike Price + Net Premium Upper breakeven = Higher Strike Price - Net Premium |
| Investor Intention | Let Options Expire Worthlessly | Stock price remains between the 2 option Strike Prices and the options expire worthlessly |
| Investor Expectation | Prices of Assets Go Down Sharply | Little or No Market Volatility |
| Strategy Summary | Risky | Profits in Stable Market |
| Advantages | Profits in Bearish Market | Higher Range of Profit |
| Disadvantages | Limited Profit, Unlimited Risk | Low Premium, Unlimited Risk |
| Market Scenarios - Profit | 1 | 1 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | Naked Call, Uncovered Call | Credit Spread |
| More Comparisons | Short Call Vs Short Put | Short Strangle Vs Short Put |
| Short Call Vs Long Combo | Short Strangle Vs Long Combo | |
| Short Call Vs Synthetic Call | Short Strangle Vs Synthetic Call | |
| Short Call Vs Long Put | Short Strangle Vs Long Put | |
| Short Call Vs Long Call | Short Strangle Vs Long Call | |
| Short Call Vs Covered Call | Short Strangle Vs Covered Call | |
| Short Call Vs Covered Put | Short Strangle Vs Covered Put | |
| Short Call Vs Protective Call | Short Strangle Vs Protective Call | |
| Short Call Vs Short Box | Short Strangle Vs Short Box | |
| Short Call Vs Long Call Condor | Short Strangle Vs Long Call Condor | |
| Short Call Vs Short Call Condor | Short Strangle Vs Short Call Condor | |
| Short Call Vs Box Spread | Short Strangle Vs Box Spread | |
| Short Call Vs Short Strangle | Short Strangle Vs Short Call | |
| Short Call Vs Long Strangle | Short Strangle Vs Long Strangle | |
| Short Call Vs Collar Strategy | Short Strangle Vs Collar Strategy | |
| Short Call Vs Long Straddle | Short Strangle Vs Long Straddle | |
| Short Call Vs Short Straddle | Short Strangle Vs Short Straddle | |
| Short Call Vs Long Call Butterfly | Short Strangle Vs Long Call Butterfly | |
| Short Call Vs Short Call Butterfly | Short Strangle Vs Short Call Butterfly | |
| Short Call Vs Bear Call Spread | Short Strangle Vs Bear Call Spread | |
| Short Call Vs Bear Put Spread | Short Strangle Vs Bear Put Spread | |
| Short Call Vs Bull Call Spread | Short Strangle Vs Bull Call Spread | |
| Short Call Vs Bull Put Spread | Short Strangle Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Short Call Vs Short Strangle 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 have a limited risk appetite, then Short Strangle is a potential option strategy for you. Generally, this strategy is suitable when you are sure that there is going to be low or no market volatility at all.
The strategy comes with a limited profit potential.
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.
