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 Straddle 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 Long Straddle 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 Long Straddle Vs Synthetic Call comparison:
| Comparison Aspect | Long Straddle | Synthetic Call |
| View |  |  |
| Strategy Introduction | Long Straddle comes into play when the trader expects the market to move sharply, however, the direction of the movement cannot be predicted. The purpose of the strategy to allow the traders to benefit from volatile markets...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 should be able to trade based on his/her conviction that the markets will move, without being concerned about the direction of the movement. | Stay with the position |
| Market Position | Neutral | Bullish |
| Strategy Level Suitable for | Beginners | Beginners |
| Options Traded | Call, Put | Put |
| Number of Positions | 2 | 2 (Underlying + Put) |
| Action Needed | 1 ATM Call, 1 ATM Put | Holds a long position in an underlying asset and a put option on the same stock |
| Risk for You | Limited | Limited |
| Profit Potential | Unlimited | Unlimited |
| Break Even Point for Investor | Lower Breakeven = Strike Price of Put - Net Premium Upper breakeven = Strike Price of Call + Net Premium | Underlying Price + Put Premium |
| Investor Intention | Put & Call Options Expire Worthlessly | Save Transaction Costs, Stay Protected from downward market movement. |
| Investor Expectation | Sharp Market Movement | Prices of the Assets to Go Up |
| Strategy Summary | Excellent & Simple | Profitable |
| Advantages | Uni-Directional Profit, Unlimited Gains | Dividends on Stocks, Limited Risk, Unlimited Profit |
| Disadvantages | High Premium | Chances of loss if the underlying goes down |
| Market Scenarios - Profit | 1 | 1 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | NA | NA |
| More Comparisons | Long Straddle Vs Short Put | Synthetic Call Vs Short Put |
| Long Straddle Vs Long Combo | Synthetic Call Vs Long Combo | |
| Long Straddle Vs Synthetic Call | Synthetic Call Vs Short Call | |
| Long Straddle Vs Long Put | Synthetic Call Vs Long Put | |
| Long Straddle Vs Long Call | Synthetic Call Vs Long Call | |
| Long Straddle Vs Covered Call | Synthetic Call Vs Covered Call | |
| Long Straddle Vs Covered Put | Synthetic Call Vs Covered Put | |
| Long Straddle Vs Protective Call | Synthetic Call Vs Protective Call | |
| Long Straddle Vs Short Box | Synthetic Call Vs Short Box | |
| Long Straddle Vs Long Call Condor | Synthetic Call Vs Long Call Condor | |
| Long Straddle Vs Short Call Condor | Synthetic Call Vs Short Call Condor | |
| Long Straddle Vs Box Spread | Synthetic Call Vs Box Spread | |
| Long Straddle Vs Short Strangle | Synthetic Call Vs Short Strangle | |
| Long Straddle Vs Long Strangle | Synthetic Call Vs Long Strangle | |
| Long Straddle Vs Collar Strategy | Synthetic Call Vs Collar Strategy | |
| Long Straddle Vs Short Call | Synthetic Call Vs Long Straddle | |
| Long Straddle Vs Short Straddle | Synthetic Call Vs Short Straddle | |
| Long Straddle Vs Long Call Butterfly | Synthetic Call Vs Long Call Butterfly | |
| Long Straddle Vs Short Call Butterfly | Synthetic Call Vs Short Call Butterfly | |
| Long Straddle Vs Bear Call Spread | Synthetic Call Vs Bear Call Spread | |
| Long Straddle Vs Bear Put Spread | Synthetic Call Vs Bear Put Spread | |
| Long Straddle Vs Bull Put Spread | Synthetic Call Vs Bull Call Spread | |
| Long Straddle Vs Bull Put Spread | Synthetic Call Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Long Straddle Vs Synthetic Call option strategies.
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.
Be aware of all the related aspects (like the ones listed above) and then make a choice for yourself.
However, if you are in a neutral market situation and are looking for unlimited profits from your share market trades, then you can opt to go for the Long Straddle strategy.
There is a limited amount of risk involved as well, however, there are good chances of high profits if the strategy is executed well.
Furthermore, as told 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.
