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 Synthetic Call 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 Synthetic Call 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 Synthetic Call comparison:
| Comparison Aspect | Short Straddle | Synthetic Call |
| View |  |  |
| Strategy Introduction | 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 | Synthetic Call is an options strategy in which an underlying asset is combined with a put option to protect against depreciation in the value of the underlying asset. The overall effect is similar to...more |
| Investor Obligation | The investor must hold strong views of the steadiness in the market to be involved in the short straddle. | Stay with the position |
| Market Position | Neutral | Bullish |
| Strategy Level Suitable for | Experts | Beginners |
| Options Traded | Call, Put | Put |
| Number of Positions | 2 | 2 (Underlying + Put) |
| Action Needed | 1 ATM Call, 1 ATM Put | Holds a long position in an underlying asset and a put option on the same stock |
| Risk for You | Unlimited | Limited |
| Profit Potential | Limited | Unlimited |
| Break Even Point for Investor | Lower Breakeven = Strike Price of Put - Net Premium Upper breakeven = Strike Price of Call+ Net Premium | Underlying Price + Put Premium |
| Investor Intention | Let Options Expire Worthlessly | Save Transaction Costs, Stay Protected from downward market movement. |
| Investor Expectation | No Market Movement | Prices of the Assets to Go Up |
| Strategy Summary | Complex | Profitable |
| Advantages | Profits in Zero Market Volatility Situation | Dividends on Stocks, Limited Risk, Unlimited Profit |
| Disadvantages | Limited Profit, Unlimited Risk | Chances of loss if the underlying goes down |
| Market Scenarios - Profit | 1 | 1 |
| Market Scenarios - Loss | 2 | 1 |
| Also called as | NA | NA |
| More Comparisons | Short Straddle Vs Short Put | Synthetic Call Vs Short Put |
| Short Straddle Vs Long Combo | Synthetic Call Vs Long Combo | |
| Short Straddle Vs Synthetic Call | Synthetic Call Vs Short Call | |
| Short Straddle Vs Long Put | Synthetic Call Vs Long Put | |
| Short Straddle Vs Long Call | Synthetic Call Vs Long Call | |
| Short Straddle Vs Covered Call | Synthetic Call Vs Covered Call | |
| Short Straddle Vs Covered Put | Synthetic Call Vs Covered Put | |
| Short Straddle Vs Protective Call | Synthetic Call Vs Protective Call | |
| Short Straddle Vs Short Box | Synthetic Call Vs Short Box | |
| Short Straddle Vs Long Call Condor | Synthetic Call Vs Long Call Condor | |
| Short Straddle Vs Short Call Condor | Synthetic Call Vs Short Call Condor | |
| Short Straddle Vs Box Spread | Synthetic Call Vs Box Spread | |
| Short Straddle Vs Short Strangle | Synthetic Call Vs Short Strangle | |
| Short Straddle Vs Long Strangle | Synthetic Call Vs Long Strangle | |
| Short Straddle Vs Collar Strategy | Synthetic Call Vs Collar Strategy | |
| Short Straddle Vs Long Straddle | Synthetic Call Vs Long Straddle | |
| Short Straddle Vs Short Call | Synthetic Call Vs Short Straddle | |
| Short Straddle Vs Long Call Butterfly | Synthetic Call Vs Long Call Butterfly | |
| Short Straddle Vs Short Call Butterfly | Synthetic Call Vs Short Call Butterfly | |
| Short Straddle Vs Bear Call Spread | Synthetic Call Vs Bear Call Spread | |
| Short Straddle Vs Bear Put Spread | Synthetic Call Vs Bear Put Spread | |
| Short Straddle Vs Bull Put Spread | Synthetic Call Vs Bull Call Spread | |
| Short Straddle Vs Bull Put Spread | Synthetic Call Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Short Straddle Vs Synthetic Call 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.
At the same time, if you are looking at a bearish market momentum and are open towards a limited risk with a potential of unlimited profits, then Synthetic Call options strategy is definitely a positive go for you.
Furthermore, as told above, it also depends on the market situation.
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