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 Synthetic Call 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 Synthetic Call 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 Synthetic Call Vs Box Spread comparison:
| Comparison Aspect | Box Spread | Synthetic Call |
| View |  |  |
| Strategy Introduction | 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 | 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 trader has the obligation to keep the positions open till they reach their respective expirations. | Stay with the position |
| Market Position | Neutral | Bullish |
| Strategy Level Suitable for | Intermediates | Beginners |
| Options Traded | Call, Put | Put |
| Number of Positions | 4 | 2 (Underlying + Put) |
| Action Needed | 1 Long ITM Call, 1 Short OTM Call, 1 Long ITM Put, 1 Short OTM Put | Holds a long position in an underlying asset and a put option on the same stock |
| Risk for You | None | Limited |
| Profit Potential | Limited | Unlimited |
| Break Even Point for Investor | NA | Underlying Price + Put Premium |
| Investor Intention | Choose the Correct Stike Prices | Save Transaction Costs, Stay Protected from downward market movement. |
| Investor Expectation | Short-term demand shifts of the options in the market. | Prices of the Assets to Go Up |
| Strategy Summary | Complicated | Profitable |
| Advantages | Risk Free, Direction Neutral | Dividends on Stocks, Limited Risk, Unlimited Profit |
| Disadvantages | Limited Profit, High Margin Maintenance, Positions cannot be closed before expiry. | Chances of loss if the underlying goes down |
| Market Scenarios - Profit | 2 | 1 |
| Market Scenarios - Loss | 0 | 1 |
| Also called as | NA | NA |
| More Comparisons | Box Spread Vs Short Put | Synthetic Call Vs Short Put |
| Box Spread Vs Long Combo | Synthetic Call Vs Long Combo | |
| Box Spread Vs Synthetic Call | Synthetic Call Vs Short Call | |
| Box Spread Vs Long Put | Synthetic Call Vs Long Put | |
| Box Spread Vs Long Call | Synthetic Call Vs Long Call | |
| Box Spread Vs Covered Call | Synthetic Call Vs Covered Call | |
| Box Spread Vs Covered Put | Synthetic Call Vs Covered Put | |
| Box Spread Vs Protective Call | Synthetic Call Vs Protective Call | |
| Box Spread Vs Short Box | Synthetic Call Vs Short Box | |
| Box Spread Vs Long Call Condor | Synthetic Call Vs Long Call Condor | |
| Box Spread Vs Short Call Condor | Synthetic Call Vs Short Call Condor | |
| Box Spread Vs Short Call | Synthetic Call Vs Box Spread | |
| Box Spread Vs Short Strangle | Synthetic Call Vs Short Strangle | |
| Box Spread Vs Long Strangle | Synthetic Call Vs Long Strangle | |
| Box Spread Vs Collar Strategy | Synthetic Call Vs Collar Strategy | |
| Box Spread Vs Long Straddle | Synthetic Call Vs Long Straddle | |
| Box Spread Vs Short Straddle | Synthetic Call Vs Short Straddle | |
| Box Spread Vs Long Call Butterfly | Synthetic Call Vs Long Call Butterfly | |
| Box Spread Vs Short Call Butterfly | Synthetic Call Vs Short Call Butterfly | |
| Box Spread Vs Bear Call Spread | Synthetic Call Vs Bear Call Spread | |
| Box Spread Vs Bear Put Spread | Synthetic Call Vs Bear Put Spread | |
| Box Spread Vs Bull Call Spread | Synthetic Call Vs Bull Call Spread | |
| Box Spread Vs Bull Put Spread | Synthetic Call Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Synthetic Call Vs Box Spread option strategies.
At the same time, 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.
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.
Furthermore, as told above, it also depends on the market situation.
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.
