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 Combo 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 Combo 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 Combo comparison:
| Comparison Aspect | Long Combo | Short Strangle |
| View |  |  |
| Strategy Introduction | The long combo is used when the investor is bullish towards the market and is certain that the prices of the shares will go up...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 strategy expects low initial investment, however, the trader needs to pay the premium on the trades irrespective of the trade result. | If the prediction does not come out true, the strategy can cause unlimited loss. |
| Market Position | Bullish | Neutral |
| Strategy Level Suitable for | Intermediates | Experts |
| Options Traded | Put, Call | Call |
| Number of Positions | 2 | 4 |
| Action Needed | Sell One OTM Put, Buy One OTM Call | 1 Short ITM Call, 1 Long ITM Call, 1 Long OTM Call, 1 Short OTM Call |
| Risk for You | Unlimited | Limited |
| Profit Potential | Unlimited | Unlimited |
| Break Even Point for Investor | Call Strike + Net Premium | Lower Breakeven = Lower Strike Price + Net Premium Upper breakeven = Higher Strike Price - Net Premium |
| Investor Intention | Low Upfront Investments, High ROI | Stock price remains between the 2 option Strike Prices and the options expire worthlessly |
| Investor Expectation | Price of Stocks Go Up | Little or No Market Volatility |
| Strategy Summary | Complex | Profits in Stable Market |
| Advantages | Low Upfront Investment, Unlimited Profits | Higher Range of Profit |
| Disadvantages | Unlimited Loss, 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 Combo Vs Short Put | Short Strangle Vs Short Put |
| Long Combo Vs Long Put | Short Strangle Vs Long Combo | |
| Long Combo Vs Synthetic Call | Short Strangle Vs Synthetic Call | |
| Long Combo Vs Short Call | Short Strangle Vs Long Put | |
| Long Combo Vs Long Call | Short Strangle Vs Long Call | |
| Long Combo Vs Covered Call | Short Strangle Vs Covered Call | |
| Long Combo Vs Covered Put | Short Strangle Vs Covered Put | |
| Long Combo Vs Protective Call | Short Strangle Vs Protective Call | |
| Long Combo Vs Short Box | Short Strangle Vs Short Box | |
| Long Combo Vs Long Call Condor | Short Strangle Vs Long Call Condor | |
| Long Combo Vs Short Call Condor | Short Strangle Vs Short Call Condor | |
| Long Combo Vs Box Spread | Short Strangle Vs Box Spread | |
| Long Combo Vs Short Strangle | Short Strangle Vs Short Call | |
| Long Combo Vs Long Strangle | Short Strangle Vs Long Strangle | |
| Long Combo Vs Collar Strategy | Short Strangle Vs Collar Strategy | |
| Long Combo Vs Long Straddle | Short Strangle Vs Long Straddle | |
| Long Combo Vs Short Straddle | Short Strangle Vs Short Straddle | |
| Long Combo Vs Long Call Butterfly | Short Strangle Vs Long Call Butterfly | |
| Long Combo Vs Short Call Butterfly | Short Strangle Vs Short Call Butterfly | |
| Long Combo Vs Bear Call Spread | Short Strangle Vs Bear Call Spread | |
| Long Combo Vs Bear Put Spread | Short Strangle Vs Bear Put Spread | |
| Long Combo Vs Bull Call Spread | Short Strangle Vs Bull Call Spread | |
| Long Combo Vs Bull Put Spread | Short Strangle Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Short Strangle Vs Long Combo option strategies.
If you are looking to put minimal initial investment and are open for unlimited profits as well as risks, then Long Combo 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.
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