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 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 Strangle 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 Strangle Vs Synthetic Call comparison:
| Comparison Aspect | Short Strangle | Synthetic Call |
| 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 | 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 | If the prediction does not come out true, the strategy can cause unlimited loss. | Stay with the position |
| Market Position | Neutral | Bullish |
| Strategy Level Suitable for | Experts | Beginners |
| Options Traded | Call | Put |
| Number of Positions | 4 | 2 (Underlying + Put) |
| Action Needed | 1 Short ITM Call, 1 Long ITM Call, 1 Long OTM Call, 1 Short OTM Call | Holds a long position in an underlying asset and a put option on the same stock |
| Risk for You | Limited | Limited |
| Profit Potential | Unlimited | Unlimited |
| Break Even Point for Investor | Lower Breakeven = Lower Strike Price + Net Premium Upper breakeven = Higher Strike Price - Net Premium | Underlying Price + Put Premium |
| Investor Intention | Stock price remains between the 2 option Strike Prices and the options expire worthlessly | Save Transaction Costs, Stay Protected from downward market movement. |
| Investor Expectation | Little or No Market Volatility | Prices of the Assets to Go Up |
| Strategy Summary | Profits in Stable Market | Profitable |
| Advantages | Higher Range of Profit | Dividends on Stocks, Limited Risk, Unlimited Profit |
| Disadvantages | Low Premium, Unlimited Risk | Chances of loss if the underlying goes down |
| Market Scenarios - Profit | 1 | 1 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | Credit Spread | NA |
| More Comparisons | Short Strangle Vs Short Put | Synthetic Call Vs Short Put |
| Short Strangle Vs Long Combo | Synthetic Call Vs Long Combo | |
| Short Strangle Vs Synthetic Call | Synthetic Call Vs Short Call | |
| Short Strangle Vs Long Put | Synthetic Call Vs Long Put | |
| Short Strangle Vs Long Call | Synthetic Call Vs Long Call | |
| Short Strangle Vs Covered Call | Synthetic Call Vs Covered Call | |
| Short Strangle Vs Covered Put | Synthetic Call Vs Covered Put | |
| Short Strangle Vs Protective Call | Synthetic Call Vs Protective Call | |
| Short Strangle Vs Short Box | Synthetic Call Vs Short Box | |
| Short Strangle Vs Long Call Condor | Synthetic Call Vs Long Call Condor | |
| Short Strangle Vs Short Call Condor | Synthetic Call Vs Short Call Condor | |
| Short Strangle Vs Box Spread | Synthetic Call Vs Box Spread | |
| Short Strangle Vs Short Call | Synthetic Call Vs Short Strangle | |
| Short Strangle Vs Long Strangle | Synthetic Call Vs Long Strangle | |
| Short Strangle Vs Collar Strategy | Synthetic Call Vs Collar Strategy | |
| Short Strangle Vs Long Straddle | Synthetic Call Vs Long Straddle | |
| Short Strangle Vs Short Straddle | Synthetic Call Vs Short Straddle | |
| Short Strangle Vs Long Call Butterfly | Synthetic Call Vs Long Call Butterfly | |
| Short Strangle Vs Short Call Butterfly | Synthetic Call Vs Short Call Butterfly | |
| Short Strangle Vs Bear Call Spread | Synthetic Call Vs Bear Call Spread | |
| Short Strangle Vs Bear Put Spread | Synthetic Call Vs Bear Put Spread | |
| Short Strangle Vs Bull Call Spread | Synthetic Call Vs Bull Call Spread | |
| Short Strangle Vs Bull Put Spread | Synthetic Call Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Short Strangle Vs Synthetic Call option strategies.
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.
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.
Be aware of all the related aspects (like the ones listed above) and then make a choice for yourself.
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