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 Protective 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 Call Vs Protective 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 Call Vs Protective Call comparison:
| Comparison Aspect | Protective Call | Long Call |
| View |  |  |
| Strategy Introduction | A Protective call combines an existing short position on an underlying asset with buying of call options, to safeguard against the price rise against the expectations...more | 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 |
| Investor Obligation | Protective call works as a protection against the price reversal and is like an insurance policy | 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. |
| Market Position | Bearish | Bullish |
| Strategy Level Suitable for | Intermediates | Intermediates |
| Options Traded | Call | Call |
| Number of Positions | 2 | 1 |
| Action Needed | Short Position on Buy Call Option | Buy Call Option |
| Risk for You | Limited | Limited to Premium |
| Profit Potential | Unlimited | Unlimited |
| Break Even Point for Investor | Underlying Price - Call Premium | Strike Price PLUS Premium |
| Investor Intention | Protect himself from extra losses if Price goes Up | Exercise Option if Profitable, Let it go otherwise |
| Investor Expectation | Market Prices to Go Down | Prices of Assets Go Up Sharply |
| Strategy Summary | Experience Helps | Attractive |
| Advantages | Unlimited Profit, limited Risk | Unlimited Profits, Limited Loss, Low Investment |
| Disadvantages | Reduced Profits due to the Premium paid for Call Option. | Premium may eat up the Profits |
| Market Scenarios - Profit | 1 | 1 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | Synthetic Long Put | NA |
| More Comparisons | Protective Call Vs Short Put | Long Call Vs Long Put |
| Protective Call Vs Long Combo | Long Call Vs Long Combo | |
| Protective Call Vs Synthetic Call | Long Call Vs Synthetic Call | |
| Protective Call Vs Long Put | Long Call Vs Short Call | |
| Protective Call Vs Long Call | Long Call Vs Short Put | |
| Protective Call Vs Covered Call | Long Call Vs Covered Call | |
| Protective Call Vs Covered Put | Long Call Vs Covered Put | |
| Protective Call Vs Short Call | Long Call Vs Protective Call | |
| Protective Call Vs Short Box | Long Call Vs Short Box | |
| Protective Call Vs Long Call Condor | Long Call Vs Long Call Condor | |
| Protective Call Vs Short Call Condor | Long Call Vs Short Call Condor | |
| Protective Call Vs Box Spread | Long Call Vs Box Spread | |
| Protective Call Vs Short Strangle | Long Call Vs Short Strangle | |
| Protective Call Vs Long Strangle | Long Call Vs Long Strangle | |
| Protective Call Vs Collar Strategy | Long Call Vs Collar Strategy | |
| Protective Call Vs Long Straddle | Long Call Vs Long Straddle | |
| Protective Call Vs Short Straddle | Long Call Vs Short Straddle | |
| Protective Call Vs Long Call Butterfly | Long Call Vs Long Call Butterfly | |
| Protective Call Vs Short Call Butterfly | Long Call Vs Short Call Butterfly | |
| Protective Call Vs Bear Call Spread | Long Call Vs Bear Call Spread | |
| Protective Call Vs Bear Put Spread | Long Call Vs Bear Put Spread | |
| Protective Call Vs Bull Call Spread | Long Call Vs Bull Call Spread | |
| Protective Call Vs Bull Put Spread | Long Call Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Long Call Vs Protective Call 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 bearish market momentum and want to take a limited risk with an eye on unlimited profits, then the protective call is the strategy you must be using.
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