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 Bear Call Spread 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 Bear Call Spread 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 Bear Call Spread comparison:
| Comparison Aspect | Bear Call Spread | Long Straddle |
| View |  |  |
| Strategy Introduction | The bear call spread consists of two calls, both with the same underlying asset and expiration date, but the strike price of the call options bought is less than the strike price of the same number of call options sold. Like most of the spread strategies, it is a limited-risk...more | 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 |
| Investor Obligation | As a thumb rule, the expiration date must be about 30-45 days away in order to be able to take advantage of the accelerating time decay. | 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. |
| Market Position | Moderately Bearish | Neutral |
| Strategy Level Suitable for | Intermediates | Beginners |
| Options Traded | Call | Call, Put |
| Number of Positions | 2 | 2 |
| Action Needed | Buy OTM Call, Sell OTM Call | 1 ATM Call, 1 ATM Put |
| Risk for You | Limited | Limited |
| Profit Potential | Limited | Unlimited |
| Break Even Point for Investor | Strike Price of Short Call + Net Premium Received | Lower Breakeven = Strike Price of Put - Net Premium Upper breakeven = Strike Price of Call + Net Premium |
| Investor Intention | Let Options Expire Worthlessly | Put & Call Options Expire Worthlessly |
| Investor Expectation | Market to go down gradually, but moderately | Sharp Market Movement |
| Strategy Summary | Limited Risk Limited Profit | Excellent & Simple |
| Advantages | Profit when Market is going down, Limited Risk | Uni-Directional Profit, Unlimited Gains |
| Disadvantages | Limited Profit | High Premium |
| Market Scenarios - Profit | 2 | 1 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | NA | NA |
| More Comparisons | Bear Call Spread Vs Short Put | Long Straddle Vs Short Put |
| Bear Call Spread Vs Long Combo | Long Straddle Vs Long Combo | |
| Bear Call Spread Vs Synthetic Call | Long Straddle Vs Synthetic Call | |
| Bear Call Spread Vs Long Put | Long Straddle Vs Long Put | |
| Bear Call Spread Vs Long Call | Long Straddle Vs Long Call | |
| Bear Call Spread Vs Covered Call | Long Straddle Vs Covered Call | |
| Bear Call Spread Vs Covered Put | Long Straddle Vs Covered Put | |
| Bear Call Spread Vs Protective Call | Long Straddle Vs Protective Call | |
| Bear Call Spread Vs Short Box | Long Straddle Vs Short Box | |
| Bear Call Spread Vs Long Call Condor | Long Straddle Vs Long Call Condor | |
| Bear Call Spread Vs Short Call Condor | Long Straddle Vs Short Call Condor | |
| Bear Call Spread Vs Box Spread | Long Straddle Vs Box Spread | |
| Bear Call Spread Vs Short Strangle | Long Straddle Vs Short Strangle | |
| Bear Call Spread Vs Long Strangle | Long Straddle Vs Long Strangle | |
| Bear Call Spread Vs Collar Strategy | Long Straddle Vs Collar Strategy | |
| Bear Call Spread Vs Long Straddle | Long Straddle Vs Short Call | |
| Bear Call Spread Vs Short Straddle | Long Straddle Vs Short Straddle | |
| Bear Call Spread Vs Long Call Butterfly | Long Straddle Vs Long Call Butterfly | |
| Bear Call Spread Vs Short Call Butterfly | Long Straddle Vs Short Call Butterfly | |
| Bear Call Spread Vs Short Call | Long Straddle Vs Bear Call Spread | |
| Bear Call Spread Vs Bear Put Spread | Long Straddle Vs Bear Put Spread | |
| Bear Call Spread Vs Bull Call Spread | Long Straddle Vs Bull Put Spread | |
| Bear Call Spread Vs Bull Put Spread | Long Straddle Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Long Straddle Vs Bear Call Spread option strategies.
As the name suggests, if you are looking at a slightly bearish market position and are open for a little risk, then bear call spread is something you can try in your trades. Having said that, the profit you can expect is going to be on a relatively limited level while using this strategy.
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.
