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 Long Call Butterfly 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 Long Call Butterfly 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 Long Call Butterfly comparison:
| Comparison Aspect | Long Call Butterfly | Short Strangle |
| View |  |  |
| Strategy Introduction | Long Call Butterfly is the options trading strategy which is used when the trader has a neutral outlook towards the market and expects the prices to remain range-bound...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 | Create Bull Spread when High Market Expectations, Create Bear Spread when Low Market Expectations. | If the prediction does not come out true, the strategy can cause unlimited loss. |
| Market Position | Neutral | Neutral |
| Strategy Level Suitable for | Intermediates | Experts |
| Options Traded | Call | Call |
| Number of Positions | 4 | 4 |
| Action Needed | 2 ATM, 1 ITM, 1 OTM Calls | 1 Short ITM Call, 1 Long ITM Call, 1 Long OTM Call, 1 Short OTM Call |
| Risk for You | Limited | Limited |
| Profit Potential | Limited | Unlimited |
| Break Even Point for Investor | Lower Break-even = Lower Strike Price + Net Premium Upper Break-even = Higher Strike Price - Net Premium | Lower Breakeven = Lower Strike Price + Net Premium Upper breakeven = Higher Strike Price - Net Premium |
| Investor Intention | Options expire worthless except the one with the lower strike price | Stock price remains between the 2 option Strike Prices and the options expire worthlessly |
| Investor Expectation | No Movement in Price of the Underlying Asset | Little or No Market Volatility |
| Strategy Summary | Effective | Profits in Stable Market |
| Advantages | Profits in Low Market Volatility, Limited Risks | Higher Range of Profit |
| Disadvantages | Limited Profit, High Premium | Low Premium, Unlimited Risk |
| Market Scenarios - Profit | 1 | 1 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | NA | Credit Spread |
| More Comparisons | Long Call Butterfly Vs Short Put | Short Strangle Vs Short Put |
| Long Call Butterfly Vs Long Combo | Short Strangle Vs Long Combo | |
| Long Call Butterfly Vs Synthetic Call | Short Strangle Vs Synthetic Call | |
| Long Call Butterfly Vs Long Put | Short Strangle Vs Long Put | |
| Long Call Butterfly Vs Long Call | Short Strangle Vs Long Call | |
| Long Call Butterfly Vs Covered Call | Short Strangle Vs Covered Call | |
| Long Call Butterfly Vs Covered Put | Short Strangle Vs Covered Put | |
| Long Call Butterfly Vs Protective Call | Short Strangle Vs Protective Call | |
| Long Call Butterfly Vs Short Box | Short Strangle Vs Short Box | |
| Long Call Butterfly Vs Long Call Condor | Short Strangle Vs Long Call Condor | |
| Long Call Butterfly Vs Short Call Condor | Short Strangle Vs Short Call Condor | |
| Long Call Butterfly Vs Box Spread | Short Strangle Vs Box Spread | |
| Long Call Butterfly Vs Short Strangle | Short Strangle Vs Short Call | |
| Long Call Butterfly Vs Long Strangle | Short Strangle Vs Long Strangle | |
| Long Call Butterfly Vs Collar Strategy | Short Strangle Vs Collar Strategy | |
| Long Call Butterfly Vs Long Straddle | Short Strangle Vs Long Straddle | |
| Long Call Butterfly Vs Short Straddle | Short Strangle Vs Short Straddle | |
| Long Call Butterfly Vs Short Call | Short Strangle Vs Long Call Butterfly | |
| Long Call Butterfly Vs Short Call Butterfly | Short Strangle Vs Short Call Butterfly | |
| Long Call Butterfly Vs Bear Call Spread | Short Strangle Vs Bear Call Spread | |
| Long Call Butterfly Vs Bear Put Spread | Short Strangle Vs Bear Put Spread | |
| Long Call Butterfly Vs Bull Call Spread | Short Strangle Vs Bull Call Spread | |
| Long Call Butterfly Vs Bull Put Spread | Short Strangle Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Short Strangle Vs Long Call Butterfly option strategies.
However, if you are in a neutral market situation and want to take a limited risk, then Long Call Butterfly is one of the options trading strategies you can look out for.
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.
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