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 Short Box 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 Short Box 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 Short Box comparison:
| Comparison Aspect | Long Call | Short Box |
| 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 | Short Box involves selling a bull call spread along with a bear put spread, both at the same strike prices and expiration date, so that both the spreads balance each other out and create an arbitrage...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. | Recognize Put Call Parity distrubance as soon as possible and take positions to capture the movement. |
| Market Position | Bullish | Neutral |
| Strategy Level Suitable for | Intermediates | Experts |
| Options Traded | Call | 1 Short ITM Call, 1 Long OTM Call, 1 Short ITM Put, 1 Long OTM Put |
| Number of Positions | 1 | 4 |
| Action Needed | Buy Call Option | Sell bull call spread along with a Bear put spread |
| Risk for You | Limited to Premium | None |
| Profit Potential | Unlimited | Limited |
| Break Even Point for Investor | Strike Price PLUS Premium | Not Required, Almost No Risk/Loss |
| Investor Intention | Exercise Option if Profitable, Let it go otherwise | Take Positions at the right time and capture the profit. |
| Investor Expectation | Prices of Assets Go Up Sharply | Profits generated from the strategy will be enough to compensate for the commissions and brokerages paid |
| Strategy Summary | Attractive | Complicated |
| Advantages | Unlimited Profits, Limited Loss, Low Investment | No Capital Needed, Zero Risk |
| Disadvantages | Premium may eat up the Profits | Low Profit |
| Market Scenarios - Profit | 1 | 3 |
| Market Scenarios - Loss | 1 | 0 |
| Also called as | NA | NA |
| More Comparisons | Long Call Vs Long Put | Short Box Vs Short Put |
| Long Call Vs Long Combo | Short Box Vs Long Combo | |
| Long Call Vs Synthetic Call | Short Box Vs Synthetic Call | |
| Long Call Vs Short Call | Short Box Vs Long Put | |
| Long Call Vs Short Put | Short Box Vs Long Call | |
| Long Call Vs Covered Call | Short Box Vs Covered Call | |
| Long Call Vs Covered Put | Short Box Vs Covered Put | |
| Long Call Vs Protective Call | Short Box Vs Protective Call | |
| Long Call Vs Short Box | Short Box Vs Short Call | |
| Long Call Vs Long Call Condor | Short Box Vs Long Call Condor | |
| Long Call Vs Short Call Condor | Short Box Vs Short Call Condor | |
| Long Call Vs Box Spread | Short Box Vs Box Spread | |
| Long Call Vs Short Strangle | Short Box Vs Short Strangle | |
| Long Call Vs Long Strangle | Short Box Vs Long Strangle | |
| Long Call Vs Collar Strategy | Short Box Vs Collar Strategy | |
| Long Call Vs Long Straddle | Short Box Vs Long Straddle | |
| Long Call Vs Short Straddle | Short Box Vs Short Straddle | |
| Long Call Vs Long Call Butterfly | Short Box Vs Long Call Butterfly | |
| Long Call Vs Short Call Butterfly | Short Box Vs Short Call Butterfly | |
| Long Call Vs Bear Call Spread | Short Box Vs Bear Call Spread | |
| Long Call Vs Bear Put Spread | Short Box Vs Bear Put Spread | |
| Long Call Vs Bull Call Spread | Short Box Vs Bull Call Spread | |
| Long Call Vs Bull Put Spread | Short Box Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Long Call Vs Short Box option strategies.
As mentioned above, if you are in a Bullish market situation and want to make unlimited profits on your trades, then Long Call is one of the options trading strategies you can opt for. The risk involved in this strategy is more than limited and thus, the strategy can only work for higher profits if you have the experience to run similar strategies in the past.
At the same time, if you are looking at a neutral market or there is not much happening in some of the sectors you are looking to invest in, then Short Box is one optimal option trading strategy for you.
Remember, the Short box strategy has no risk but provides a consistent (and limited) profits to your trades. To add to that, it is a relatively complex strategy too.
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