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 Bull Call Spread Vs Short Call Butterfly 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 Bull Call Spread Vs Short Call Butterfly 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 Bull Call Spread Vs Short Call Butterfly comparison:
| Comparison Aspect | Bull Call Spread | Short Call Butterfly |
| View |  |  |
| Strategy Introduction | Bull Call Spread is a vertical options strategy that involves buying and selling two option contracts simultaneously, both with the same underlying security and expiry, but different strike prices...more | Short Call Butterfly is the options strategy which is used when the trader expects a lot of volatility in the market. It is the opposite of the long call butterfly, in which the investor expects...more |
| Investor Obligation | It involves buying and selling two option contracts simultaneously, both with the same underlying security and expiry, but different strike prices. | It is necessary that the strike prices of the in-the-money and out-of-the-money call options are equidistant from the at-the-money call options, and all the options have the same expiration date. |
| Market Position | Moderately Bullish | Neutral |
| Strategy Level Suitable for | Beginners | Intermediates |
| Options Traded | Call | Call |
| Number of Positions | 2 | 4 |
| Action Needed | 1 ATM Call, 1 OTM Call | 2 ATM, 1 ITM, 1 OTM Calls |
| Risk for You | Limited | Limited |
| Profit Potential | Limited | Limited |
| Break Even Point for Investor | Strike price of Purchased Call + Net premium paid | Lower Break-even = Lower Strike Price + Net Premium Upper Break-even = Higher Strike Price - Net Premium |
| Investor Intention | Let Options Expire Worthlessly | Let Options Expire Worthlessly |
| Investor Expectation | Prices of the securities to Go Up moderately | High Market Volatility |
| Strategy Summary | Safe Play | Profit in Unsure Market Situations |
| Advantages | Limited Risk | Limited Exposure, Low Investment |
| Disadvantages | Capped Profit | Low Returns, Requires Significant Market Movement |
| Market Scenarios - Profit | 3 | 1 |
| Market Scenarios - Loss | 2 | 1 |
| Also called as | NA | NA |
| More Comparisons | Bull Call Spread Vs Short Put | |
| Bull Call Spread Vs Long Combo | ||
| Bull Call Spread Vs Synthetic Call | ||
| Bull Call Spread Vs Long Put | ||
| Bull Call Spread Vs Long Call | ||
| Bull Call Spread Vs Covered Call | ||
| Bull Call Spread Vs Covered Put | ||
| Bull Call Spread Vs Protective Call | ||
| Bull Call Spread Vs Short Box | ||
| Bull Call Spread Vs Long Call Condor | ||
| Bull Call Spread Vs Short Call Condor | ||
| Bull Call Spread Vs Box Spread | ||
| Bull Call Spread Vs Short Strangle | ||
| Bull Call Spread Vs Long Strangle | ||
| Bull Call Spread Vs Collar Strategy | ||
| Bull Call Spread Vs Long Straddle | ||
| Bull Call Spread Vs Short Straddle | ||
| Bull Call Spread Vs Long Call Butterfly | ||
| Bull Call Spread Vs Short Call Butterfly | ||
| Bull Call Spread Vs Bear Call Spread | ||
| Bull Call Spread Vs Bear Put Spread | ||
| Bull Call Spread Vs Short Call | ||
| Bull Call Spread Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Bull Call Spread Vs Short Call Butterfly option strategies.
At the same time, if you as a trader are expecting price movement (without any idea of the direction) within a neutral market momentum – then short call butterfly is an optimal strategy for you.
There is a limited amount of risk involved and you can expect limited profit only in this options strategy.
If you are in a moderately bullish market set-up and have a limited market risk appetite then you make consider using the Bull Call Spread strategy in your trades.
To add to that, the profit you get using this strategy is also limited in scope.
Furthermore, as told above, it also depends on the market situation.
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