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 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 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 Call Vs Short Call comparison:
| Comparison Aspect | Short Call | Long Call |
| View |  |  |
| Strategy Introduction | 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 | 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 | The trader has the obligation to buy the stock at the predetermined price at the time of expiration. | 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 | Experts | Intermediates |
| Options Traded | Call | Call |
| Number of Positions | 1 | 1 |
| Action Needed | Sell Call Option | Buy Call Option |
| Risk for You | Unlimited | Limited to Premium |
| Profit Potential | Limited | Unlimited |
| Break Even Point for Investor | Strike Price PLUS Premium | Strike Price PLUS Premium |
| Investor Intention | Let Options Expire Worthlessly | Exercise Option if Profitable, Let it go otherwise |
| Investor Expectation | Prices of Assets Go Down Sharply | Prices of Assets Go Up Sharply |
| Strategy Summary | Risky | Attractive |
| Advantages | Profits in Bearish Market | Unlimited Profits, Limited Loss, Low Investment |
| Disadvantages | Limited Profit, Unlimited Risk | Premium may eat up the Profits |
| Market Scenarios - Profit | 1 | 1 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | Naked Call, Uncovered Call | NA |
| More Comparisons | Short Call Vs Short Put | Long Call Vs Long Put |
| Short Call Vs Long Combo | Long Call Vs Long Combo | |
| Short Call Vs Synthetic Call | Long Call Vs Synthetic Call | |
| Short Call Vs Long Put | Long Call Vs Short Call | |
| Short Call Vs Long Call | Long Call Vs Short Put | |
| Short Call Vs Covered Call | Long Call Vs Covered Call | |
| Short Call Vs Covered Put | Long Call Vs Covered Put | |
| Short Call Vs Protective Call | Long Call Vs Protective Call | |
| Short Call Vs Short Box | Long Call Vs Short Box | |
| Short Call Vs Long Call Condor | Long Call Vs Long Call Condor | |
| Short Call Vs Short Call Condor | Long Call Vs Short Call Condor | |
| Short Call Vs Box Spread | Long Call Vs Box Spread | |
| Short Call Vs Short Strangle | Long Call Vs Short Strangle | |
| Short Call Vs Long Strangle | Long Call Vs Long Strangle | |
| Short Call Vs Collar Strategy | Long Call Vs Collar Strategy | |
| Short Call Vs Long Straddle | Long Call Vs Long Straddle | |
| Short Call Vs Short Straddle | Long Call Vs Short Straddle | |
| Short Call Vs Long Call Butterfly | Long Call Vs Long Call Butterfly | |
| Short Call Vs Short Call Butterfly | Long Call Vs Short Call Butterfly | |
| Short Call Vs Bear Call Spread | Long Call Vs Bear Call Spread | |
| Short Call Vs Bear Put Spread | Long Call Vs Bear Put Spread | |
| Short Call Vs Bull Call Spread | Long Call Vs Bull Call Spread | |
| Short Call Vs Bull Put Spread | Long Call Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Long Call Vs Short 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.
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.
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