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 Long Put Vs Short 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 Long Put Vs Short 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 Long Put Vs Short Call comparison:
| Comparison Aspect | Long Put | Short Call |
| View |  |  |
| Strategy Introduction | Long Put is used when the trader has a bearish view on the market and expects the price of the asset to go down. He will then wait for the prices to go down and then exercise his option...more | Short Call is used when the trader expects that the price of the underlying asset will go down sharply, he shorts a call. If the price of the asset goes down, the strategy generates profit. However, if the price...more |
| Investor Obligation | The strategy gives the trader a right to buy the put option on expiry, but not the obligation. The trader may choose to buy the option or not. | The trader has the obligation to buy the stock at the predetermined price at the time of expiration. |
| Market Position | Bearish | Bearish |
| Strategy Level Suitable for | Beginners | Experts |
| Options Traded | Put | Call |
| Number of Positions | 1 | 1 |
| Action Needed | Buy Put Option | Sell Call Option |
| Risk for You | Limited | Unlimited |
| Profit Potential | Unlimited | Limited |
| Break Even Point for Investor | Strike Price MINUS Premium | Strike Price PLUS Premium |
| Investor Intention | Let Options Expire Worthlessly | Let Options Expire Worthlessly |
| Investor Expectation | Prices of Assets Go Down | Prices of Assets Go Down Sharply |
| Strategy Summary | Effective | Risky |
| Advantages | Unlimited Profits, Profits possible even in Bearish Market | Profits in Bearish Market |
| Disadvantages | High Premium | Limited Profit, Unlimited Risk |
| Market Scenarios - Profit | 2 | 1 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | NA | Naked Call, Uncovered Call |
| More Comparisons | Long Put Vs Short Put | Short Call Vs Short Put |
| Long Put Vs Long Combo | Short Call Vs Long Combo | |
| Long Put Vs Synthetic Call | Short Call Vs Synthetic Call | |
| Long Put Vs Short Call | Short Call Vs Long Put | |
| Long Put Vs Long Call | Short Call Vs Long Call | |
| Long Put Vs Covered Call | Short Call Vs Covered Call | |
| Long Put Vs Covered Put | Short Call Vs Covered Put | |
| Long Put Vs Protective Call | Short Call Vs Protective Call | |
| Long Put Vs Short Box | Short Call Vs Short Box | |
| Long Put Vs Long Call Condor | Short Call Vs Long Call Condor | |
| Long Put Vs Short Call Condor | Short Call Vs Short Call Condor | |
| Long Put Vs Box Spread | Short Call Vs Box Spread | |
| Long Put Vs Short Strangle | Short Call Vs Short Strangle | |
| Long Put Vs Long Strangle | Short Call Vs Long Strangle | |
| Long Put Vs Collar Strategy | Short Call Vs Collar Strategy | |
| Long Put Vs Long Straddle | Short Call Vs Long Straddle | |
| Long Put Vs Short Straddle | Short Call Vs Short Straddle | |
| Long Put Vs Long Call Butterfly | Short Call Vs Long Call Butterfly | |
| Long Put Vs Short Call Butterfly | Short Call Vs Short Call Butterfly | |
| Long Put Vs Bear Call Spread | Short Call Vs Bear Call Spread | |
| Long Put Vs Bear Put Spread | Short Call Vs Bear Put Spread | |
| Long Put Vs Bull Call Spread | Short Call Vs Bull Call Spread | |
| Long Put Vs Bull Put Spread | Short Call Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Long Put Vs Short Call option strategies.
As mentioned above, if you are a beginner level trader and are looking for unlimited profits with limited risk – it makes sense for you to employ a Long Put Option Strategy. However, if you are looking to put minimal initial investment and have a high-risk appetite, then Short Call options strategy can work wonders for you.
Furthermore, as said 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.
