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 Strangle 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 Strangle 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 Strangle Vs Box Spread comparison:
| Comparison Aspect | Short Strangle | Box Spread |
| View |  |  |
| Strategy Introduction | 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 | 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 | If the prediction does not come out true, the strategy can cause unlimited loss. | The trader has the obligation to keep the positions open till they reach their respective expirations. |
| Market Position | Neutral | Neutral |
| Strategy Level Suitable for | Experts | Intermediates |
| Options Traded | Call | Call, Put |
| Number of Positions | 4 | 4 |
| Action Needed | 1 Short ITM Call, 1 Long ITM Call, 1 Long OTM Call, 1 Short OTM Call | 1 Long ITM Call, 1 Short OTM Call, 1 Long ITM Put, 1 Short OTM Put |
| Risk for You | Limited | None |
| Profit Potential | Unlimited | Limited |
| Break Even Point for Investor | Lower Breakeven = Lower Strike Price + Net Premium Upper breakeven = Higher Strike Price - Net Premium | NA |
| Investor Intention | Stock price remains between the 2 option Strike Prices and the options expire worthlessly | Choose the Correct Stike Prices |
| Investor Expectation | Little or No Market Volatility | Short-term demand shifts of the options in the market. |
| Strategy Summary | Profits in Stable Market | Complicated |
| Advantages | Higher Range of Profit | Risk Free, Direction Neutral |
| Disadvantages | Low Premium, 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 | Credit Spread | NA |
| More Comparisons | Short Strangle Vs Short Put | Box Spread Vs Short Put |
| Short Strangle Vs Long Combo | Box Spread Vs Long Combo | |
| Short Strangle Vs Synthetic Call | Box Spread Vs Synthetic Call | |
| Short Strangle Vs Long Put | Box Spread Vs Long Put | |
| Short Strangle Vs Long Call | Box Spread Vs Long Call | |
| Short Strangle Vs Covered Call | Box Spread Vs Covered Call | |
| Short Strangle Vs Covered Put | Box Spread Vs Covered Put | |
| Short Strangle Vs Protective Call | Box Spread Vs Protective Call | |
| Short Strangle Vs Short Box | Box Spread Vs Short Box | |
| Short Strangle Vs Long Call Condor | Box Spread Vs Long Call Condor | |
| Short Strangle Vs Short Call Condor | Box Spread Vs Short Call Condor | |
| Short Strangle Vs Box Spread | Box Spread Vs Short Call | |
| Short Strangle Vs Short Call | Box Spread Vs Short Strangle | |
| Short Strangle Vs Long Strangle | Box Spread Vs Long Strangle | |
| Short Strangle Vs Collar Strategy | Box Spread Vs Collar Strategy | |
| Short Strangle Vs Long Straddle | Box Spread Vs Long Straddle | |
| Short Strangle Vs Short Straddle | Box Spread Vs Short Straddle | |
| Short Strangle Vs Long Call Butterfly | Box Spread Vs Long Call Butterfly | |
| Short Strangle Vs Short Call Butterfly | Box Spread Vs Short Call Butterfly | |
| Short Strangle Vs Bear Call Spread | Box Spread Vs Bear Call Spread | |
| Short Strangle Vs Bear Put Spread | Box Spread Vs Bear Put Spread | |
| Short Strangle Vs Bull Call Spread | Box Spread Vs Bull Call Spread | |
| Short Strangle Vs Bull Put Spread | Box Spread Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Short Strangle Vs Box Spread option strategies.
Furthermore, 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.
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.
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.
