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 Straddle Vs Bear Call 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 Straddle Vs Bear Call 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 Straddle Vs Bear Call Spread comparison:
| Comparison Aspect | Bear Call Spread | Short Straddle |
| View |  |  |
| Strategy Introduction | The bear call spread consists of two calls, both with the same underlying asset and expiration date, but the strike price of the call options bought is less than the strike price of the same number of call options sold. Like most of the spread strategies, it is a limited-risk...more | Using the short straddle strategy, the investor makes an upfront gain through the premiums collected by writing the call and put options. The investor expects that there...more |
| Investor Obligation | As a thumb rule, the expiration date must be about 30-45 days away in order to be able to take advantage of the accelerating time decay. | The investor must hold strong views of the steadiness in the market to be involved in the short straddle. |
| Market Position | Moderately Bearish | Neutral |
| Strategy Level Suitable for | Intermediates | Experts |
| Options Traded | Call | Call, Put |
| Number of Positions | 2 | 2 |
| Action Needed | Buy OTM Call, Sell OTM Call | 1 ATM Call, 1 ATM Put |
| Risk for You | Limited | Unlimited |
| Profit Potential | Limited | Limited |
| Break Even Point for Investor | Strike Price of Short Call + Net Premium Received | Lower Breakeven = Strike Price of Put - Net Premium Upper breakeven = Strike Price of Call+ Net Premium |
| Investor Intention | Let Options Expire Worthlessly | Let Options Expire Worthlessly |
| Investor Expectation | Market to go down gradually, but moderately | No Market Movement |
| Strategy Summary | Limited Risk Limited Profit | Complex |
| Advantages | Profit when Market is going down, Limited Risk | Profits in Zero Market Volatility Situation |
| Disadvantages | Limited Profit | Limited Profit, Unlimited Risk |
| Market Scenarios - Profit | 2 | 1 |
| Market Scenarios - Loss | 1 | 2 |
| Also called as | NA | NA |
| More Comparisons | Bear Call Spread Vs Short Put | Short Straddle Vs Short Put |
| Bear Call Spread Vs Long Combo | Short Straddle Vs Long Combo | |
| Bear Call Spread Vs Synthetic Call | Short Straddle Vs Synthetic Call | |
| Bear Call Spread Vs Long Put | Short Straddle Vs Long Put | |
| Bear Call Spread Vs Long Call | Short Straddle Vs Long Call | |
| Bear Call Spread Vs Covered Call | Short Straddle Vs Covered Call | |
| Bear Call Spread Vs Covered Put | Short Straddle Vs Covered Put | |
| Bear Call Spread Vs Protective Call | Short Straddle Vs Protective Call | |
| Bear Call Spread Vs Short Box | Short Straddle Vs Short Box | |
| Bear Call Spread Vs Long Call Condor | Short Straddle Vs Long Call Condor | |
| Bear Call Spread Vs Short Call Condor | Short Straddle Vs Short Call Condor | |
| Bear Call Spread Vs Box Spread | Short Straddle Vs Box Spread | |
| Bear Call Spread Vs Short Strangle | Short Straddle Vs Short Strangle | |
| Bear Call Spread Vs Long Strangle | Short Straddle Vs Long Strangle | |
| Bear Call Spread Vs Collar Strategy | Short Straddle Vs Collar Strategy | |
| Bear Call Spread Vs Long Straddle | Short Straddle Vs Long Straddle | |
| Bear Call Spread Vs Short Straddle | Short Straddle Vs Short Call | |
| Bear Call Spread Vs Long Call Butterfly | Short Straddle Vs Long Call Butterfly | |
| Bear Call Spread Vs Short Call Butterfly | Short Straddle Vs Short Call Butterfly | |
| Bear Call Spread Vs Short Call | Short Straddle Vs Bear Call Spread | |
| Bear Call Spread Vs Bear Put Spread | Short Straddle Vs Bear Put Spread | |
| Bear Call Spread Vs Bull Call Spread | Short Straddle Vs Bull Put Spread | |
| Bear Call Spread Vs Bull Put Spread | Short Straddle Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Short Straddle Vs Bear Call Spread option strategies.
At the same time, if you are an experienced trader and are in a neutral market situation, then Short Straddle is one of the options you can look out for.
There is a high amount of risk involved as well – thus, you have to be very sure of the point that the market has no volatility. Otherwise, stakes can be very high.
As the name suggests, if you are looking at a slightly bearish market position and are open for a little risk, then bear call spread is something you can try in your trades. Having said that, the profit you can expect is going to be on a relatively limited level while using this strategy.
This needs to be known that the profit you get using this strategy is also limited in scope.
Furthermore, as told above, it also depends on the market situation.
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