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 Butterfly 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 Call Butterfly 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 Call Butterfly Vs Long Combo comparison:
| Comparison Aspect | Short Call Butterfly | Long Combo |
| View |  |  |
| Strategy Introduction | 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 | 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 |
| Investor Obligation | 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. | The strategy expects low initial investment, however, the trader needs to pay the premium on the trades irrespective of the trade result. |
| Market Position | Neutral | Bullish |
| Strategy Level Suitable for | Intermediates | Intermediates |
| Options Traded | Call | Put, Call |
| Number of Positions | 4 | 2 |
| Action Needed | 2 ATM, 1 ITM, 1 OTM Calls | Sell One OTM Put, Buy One OTM Call |
| Risk for You | Limited | Unlimited |
| Profit Potential | Limited | Unlimited |
| Break Even Point for Investor | Lower Break-even = Lower Strike Price + Net Premium Upper Break-even = Higher Strike Price - Net Premium | Call Strike + Net Premium |
| Investor Intention | Let Options Expire Worthlessly | Low Upfront Investments, High ROI |
| Investor Expectation | High Market Volatility | Price of Stocks Go Up |
| Strategy Summary | Profit in Unsure Market Situations | Complex |
| Advantages | Limited Exposure, Low Investment | Low Upfront Investment, Unlimited Profits |
| Disadvantages | Low Returns, Requires Significant Market Movement | Unlimited Loss, High Premium |
| Market Scenarios - Profit | 1 | 1 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | NA | NA |
| More Comparisons | Short Call Butterfly Vs Short Put | Long Combo Vs Short Put |
| Short Call Butterfly Vs Long Combo | Long Combo Vs Long Put | |
| Short Call Butterfly Vs Synthetic Call | Long Combo Vs Synthetic Call | |
| Short Call Butterfly Vs Long Put | Long Combo Vs Short Call | |
| Short Call Butterfly Vs Long Call | Long Combo Vs Long Call | |
| Short Call Butterfly Vs Covered Call | Long Combo Vs Covered Call | |
| Short Call Butterfly Vs Covered Put | Long Combo Vs Covered Put | |
| Short Call Butterfly Vs Protective Call | Long Combo Vs Protective Call | |
| Short Call Butterfly Vs Short Box | Long Combo Vs Short Box | |
| Short Call Butterfly Vs Long Call Condor | Long Combo Vs Long Call Condor | |
| Short Call Butterfly Vs Short Call Condor | Long Combo Vs Short Call Condor | |
| Short Call Butterfly Vs Box Spread | Long Combo Vs Box Spread | |
| Short Call Butterfly Vs Short Strangle | Long Combo Vs Short Strangle | |
| Short Call Butterfly Vs Long Strangle | Long Combo Vs Long Strangle | |
| Short Call Butterfly Vs Collar Strategy | Long Combo Vs Collar Strategy | |
| Short Call Butterfly Vs Long Straddle | Long Combo Vs Long Straddle | |
| Short Call Butterfly Vs Short Straddle | Long Combo Vs Short Straddle | |
| Short Call Butterfly Vs Long Call Butterfly | Long Combo Vs Long Call Butterfly | |
| Short Call Butterfly Vs Short Call | Long Combo Vs Short Call Butterfly | |
| Short Call Butterfly Vs Bear Call Spread | Long Combo Vs Bear Call Spread | |
| Short Call Butterfly Vs Bear Put Spread | Long Combo Vs Bear Put Spread | |
| Short Call Butterfly Vs Bull Call Spread | Long Combo Vs Bull Call Spread | |
| Short Call Butterfly Vs Bull Put Spread | Long Combo Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Short Call Butterfly Vs Long Combo option strategies.
Furthermore, 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 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.
Furthermore, as told above, it also depends on the market situation.
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