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 Call 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 Long Call 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 Long Call Vs Long Call Butterfly comparison:
Comparison Aspect | Long Call | Long Call Butterfly |
View | ||
Strategy Introduction | In Long Call Strategy, the trader enters into a contract to buy a call option when he is bullish towards the market. The trader anticipates that the price of the security will go up in the future. However, he does not want to take the risk of buying the security outright...more | 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 |
Investor Obligation | The trader has the right to buy a security at a future date at a predefined price. The term long itself means buying a security or buying an option. | Create Bull Spread when High Market Expectations, Create Bear Spread when Low Market Expectations. |
Market Position | Bullish | Neutral |
Strategy Level Suitable for | Intermediates | Intermediates |
Options Traded | Call | Call |
Number of Positions | 1 | 4 |
Action Needed | Buy Call Option | 2 ATM, 1 ITM, 1 OTM Calls |
Risk for You | Limited to Premium | Limited |
Profit Potential | Unlimited | Limited |
Break Even Point for Investor | Strike Price PLUS Premium | Lower Break-even = Lower Strike Price + Net Premium Upper Break-even = Higher Strike Price - Net Premium |
Investor Intention | Exercise Option if Profitable, Let it go otherwise | Options expire worthless except the one with the lower strike price |
Investor Expectation | Prices of Assets Go Up Sharply | No Movement in Price of the Underlying Asset |
Strategy Summary | Attractive | Effective |
Advantages | Unlimited Profits, Limited Loss, Low Investment | Profits in Low Market Volatility, Limited Risks |
Disadvantages | Premium may eat up the Profits | Limited Profit, High Premium |
Market Scenarios - Profit | 1 | 1 |
Market Scenarios - Loss | 1 | 1 |
Also called as | NA | NA |
More Comparisons | Long Call Vs Long Put | Long Call Butterfly Vs Short Put |
Long Call Vs Long Combo | Long Call Butterfly Vs Long Combo | |
Long Call Vs Synthetic Call | Long Call Butterfly Vs Synthetic Call | |
Long Call Vs Short Call | Long Call Butterfly Vs Long Put | |
Long Call Vs Short Put | Long Call Butterfly Vs Long Call | |
Long Call Vs Covered Call | Long Call Butterfly Vs Covered Call | |
Long Call Vs Covered Put | Long Call Butterfly Vs Covered Put | |
Long Call Vs Protective Call | Long Call Butterfly Vs Protective Call | |
Long Call Vs Short Box | Long Call Butterfly Vs Short Box | |
Long Call Vs Long Call Condor | Long Call Butterfly Vs Long Call Condor | |
Long Call Vs Short Call Condor | Long Call Butterfly Vs Short Call Condor | |
Long Call Vs Box Spread | Long Call Butterfly Vs Box Spread | |
Long Call Vs Short Strangle | Long Call Butterfly Vs Short Strangle | |
Long Call Vs Long Strangle | Long Call Butterfly Vs Long Strangle | |
Long Call Vs Collar Strategy | Long Call Butterfly Vs Collar Strategy | |
Long Call Vs Long Straddle | Long Call Butterfly Vs Long Straddle | |
Long Call Vs Short Straddle | Long Call Butterfly Vs Short Straddle | |
Long Call Vs Long Call Butterfly | Long Call Butterfly Vs Short Call | |
Long Call Vs Short Call Butterfly | Long Call Butterfly Vs Short Call Butterfly | |
Long Call Vs Bear Call Spread | Long Call Butterfly Vs Bear Call Spread | |
Long Call Vs Bear Put Spread | Long Call Butterfly Vs Bear Put Spread | |
Long Call Vs Bull Call Spread | Long Call Butterfly Vs Bull Call Spread | |
Long Call Vs Bull Put Spread | Long Call Butterfly Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Long Call Vs Long Call Butterfly option strategies.
At the same time, 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.
The profit you get using this strategy is also limited in scope.
However, if your risk appetite is relatively high – then you can try Short Put although the profit potential in that strategy is limited.
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.