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 Box Vs Long Combo 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 Box Vs Long Combo 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 Box Vs Long Combo comparison:
| Comparison Aspect | Long Combo | Short Box |
| View |  |  |
| Strategy Introduction | The long combo is used when the investor is bullish towards the market and is certain that the prices of the shares will go up...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 strategy expects low initial investment, however, the trader needs to pay the premium on the trades irrespective of the trade result. | 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 | Put, Call | 1 Short ITM Call, 1 Long OTM Call, 1 Short ITM Put, 1 Long OTM Put |
| Number of Positions | 2 | 4 |
| Action Needed | Sell One OTM Put, Buy One OTM Call | Sell bull call spread along with a Bear put spread |
| Risk for You | Unlimited | None |
| Profit Potential | Unlimited | Limited |
| Break Even Point for Investor | Call Strike + Net Premium | Not Required, Almost No Risk/Loss |
| Investor Intention | Low Upfront Investments, High ROI | Take Positions at the right time and capture the profit. |
| Investor Expectation | Price of Stocks Go Up | Profits generated from the strategy will be enough to compensate for the commissions and brokerages paid |
| Strategy Summary | Complex | Complicated |
| Advantages | Low Upfront Investment, Unlimited Profits | No Capital Needed, Zero Risk |
| Disadvantages | Unlimited Loss, High Premium | Low Profit |
| Market Scenarios - Profit | 1 | 3 |
| Market Scenarios - Loss | 1 | 0 |
| Also called as | NA | NA |
| More Comparisons | Long Combo Vs Short Put | Short Box Vs Short Put |
| Long Combo Vs Long Put | Short Box Vs Long Combo | |
| Long Combo Vs Synthetic Call | Short Box Vs Synthetic Call | |
| Long Combo Vs Short Call | Short Box Vs Long Put | |
| Long Combo Vs Long Call | Short Box Vs Long Call | |
| Long Combo Vs Covered Call | Short Box Vs Covered Call | |
| Long Combo Vs Covered Put | Short Box Vs Covered Put | |
| Long Combo Vs Protective Call | Short Box Vs Protective Call | |
| Long Combo Vs Short Box | Short Box Vs Short Call | |
| Long Combo Vs Long Call Condor | Short Box Vs Long Call Condor | |
| Long Combo Vs Short Call Condor | Short Box Vs Short Call Condor | |
| Long Combo Vs Box Spread | Short Box Vs Box Spread | |
| Long Combo Vs Short Strangle | Short Box Vs Short Strangle | |
| Long Combo Vs Long Strangle | Short Box Vs Long Strangle | |
| Long Combo Vs Collar Strategy | Short Box Vs Collar Strategy | |
| Long Combo Vs Long Straddle | Short Box Vs Long Straddle | |
| Long Combo Vs Short Straddle | Short Box Vs Short Straddle | |
| Long Combo Vs Long Call Butterfly | Short Box Vs Long Call Butterfly | |
| Long Combo Vs Short Call Butterfly | Short Box Vs Short Call Butterfly | |
| Long Combo Vs Bear Call Spread | Short Box Vs Bear Call Spread | |
| Long Combo Vs Bear Put Spread | Short Box Vs Bear Put Spread | |
| Long Combo Vs Bull Call Spread | Short Box Vs Bull Call Spread | |
| Long Combo Vs Bull Put Spread | Short Box Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Short Box Vs Long Combo option strategies.
If you are looking to put minimal initial investment and are open for unlimited profits as well as risks, then Long Combo options strategy can work wonders 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.
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.
