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 Short Call Vs Synthetic 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 Short Call Vs Synthetic 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 Short Call Vs Synthetic Call comparison:
| Comparison Aspect | Short Call | Synthetic 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 | Synthetic Call is an options strategy in which an underlying asset is combined with a put option to protect against depreciation in the value of the underlying asset. The overall effect is similar to...more |
| Investor Obligation | The trader has the obligation to buy the stock at the predetermined price at the time of expiration. | Stay with the position |
| Market Position | Bearish | Bullish |
| Strategy Level Suitable for | Experts | Beginners |
| Options Traded | Call | Put |
| Number of Positions | 1 | 2 (Underlying + Put) |
| Action Needed | Sell Call Option | Holds a long position in an underlying asset and a put option on the same stock |
| Risk for You | Unlimited | Limited |
| Profit Potential | Limited | Unlimited |
| Break Even Point for Investor | Strike Price PLUS Premium | Underlying Price + Put Premium |
| Investor Intention | Let Options Expire Worthlessly | Save Transaction Costs, Stay Protected from downward market movement. |
| Investor Expectation | Prices of Assets Go Down Sharply | Prices of the Assets to Go Up |
| Strategy Summary | Risky | Profitable |
| Advantages | Profits in Bearish Market | Dividends on Stocks, Limited Risk, Unlimited Profit |
| Disadvantages | Limited Profit, Unlimited Risk | Chances of loss if the underlying goes down |
| 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 | Synthetic Call Vs Short Put |
| Short Call Vs Long Combo | Synthetic Call Vs Long Combo | |
| Short Call Vs Synthetic Call | Synthetic Call Vs Short Call | |
| Short Call Vs Long Put | Synthetic Call Vs Long Put | |
| Short Call Vs Long Call | Synthetic Call Vs Long Call | |
| Short Call Vs Covered Call | Synthetic Call Vs Covered Call | |
| Short Call Vs Covered Put | Synthetic Call Vs Covered Put | |
| Short Call Vs Protective Call | Synthetic Call Vs Protective Call | |
| Short Call Vs Short Box | Synthetic Call Vs Short Box | |
| Short Call Vs Long Call Condor | Synthetic Call Vs Long Call Condor | |
| Short Call Vs Short Call Condor | Synthetic Call Vs Short Call Condor | |
| Short Call Vs Box Spread | Synthetic Call Vs Box Spread | |
| Short Call Vs Short Strangle | Synthetic Call Vs Short Strangle | |
| Short Call Vs Long Strangle | Synthetic Call Vs Long Strangle | |
| Short Call Vs Collar Strategy | Synthetic Call Vs Collar Strategy | |
| Short Call Vs Long Straddle | Synthetic Call Vs Long Straddle | |
| Short Call Vs Short Straddle | Synthetic Call Vs Short Straddle | |
| Short Call Vs Long Call Butterfly | Synthetic Call Vs Long Call Butterfly | |
| Short Call Vs Short Call Butterfly | Synthetic Call Vs Short Call Butterfly | |
| Short Call Vs Bear Call Spread | Synthetic Call Vs Bear Call Spread | |
| Short Call Vs Bear Put Spread | Synthetic Call Vs Bear Put Spread | |
| Short Call Vs Bull Call Spread | Synthetic Call Vs Bull Call Spread | |
| Short Call Vs Bull Put Spread | Synthetic Call Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Short Call Vs Synthetic Call option strategies.
As mentioned above, 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.
At the same time, if you are looking at a bearish market momentum and are open towards a limited risk with a potential of unlimited profits, then Synthetic Call options strategy is definitely a positive go 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.
