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 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 Long 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 Long Call Butterfly Vs Long Combo comparison:
| Comparison Aspect | Long Call Butterfly | Long Combo |
| View |  |  |
| Strategy Introduction | Long Call Butterfly is the options trading strategy which is used when the trader has a neutral outlook towards the market and expects the prices to remain range-bound...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 | Create Bull Spread when High Market Expectations, Create Bear Spread when Low Market Expectations. | 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 | Options expire worthless except the one with the lower strike price | Low Upfront Investments, High ROI |
| Investor Expectation | No Movement in Price of the Underlying Asset | Price of Stocks Go Up |
| Strategy Summary | Effective | Complex |
| Advantages | Profits in Low Market Volatility, Limited Risks | Low Upfront Investment, Unlimited Profits |
| Disadvantages | Limited Profit, High Premium | Unlimited Loss, High Premium |
| Market Scenarios - Profit | 1 | 1 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | NA | NA |
| More Comparisons | Long Call Butterfly Vs Short Put | Long Combo Vs Short Put |
| Long Call Butterfly Vs Long Combo | Long Combo Vs Long Put | |
| Long Call Butterfly Vs Synthetic Call | Long Combo Vs Synthetic Call | |
| Long Call Butterfly Vs Long Put | Long Combo Vs Short Call | |
| Long Call Butterfly Vs Long Call | Long Combo Vs Long Call | |
| Long Call Butterfly Vs Covered Call | Long Combo Vs Covered Call | |
| Long Call Butterfly Vs Covered Put | Long Combo Vs Covered Put | |
| Long Call Butterfly Vs Protective Call | Long Combo Vs Protective Call | |
| Long Call Butterfly Vs Short Box | Long Combo Vs Short Box | |
| Long Call Butterfly Vs Long Call Condor | Long Combo Vs Long Call Condor | |
| Long Call Butterfly Vs Short Call Condor | Long Combo Vs Short Call Condor | |
| Long Call Butterfly Vs Box Spread | Long Combo Vs Box Spread | |
| Long Call Butterfly Vs Short Strangle | Long Combo Vs Short Strangle | |
| Long Call Butterfly Vs Long Strangle | Long Combo Vs Long Strangle | |
| Long Call Butterfly Vs Collar Strategy | Long Combo Vs Collar Strategy | |
| Long Call Butterfly Vs Long Straddle | Long Combo Vs Long Straddle | |
| Long Call Butterfly Vs Short Straddle | Long Combo Vs Short Straddle | |
| Long Call Butterfly Vs Short Call | Long Combo Vs Long Call Butterfly | |
| Long Call Butterfly Vs Short Call Butterfly | Long Combo Vs Short Call Butterfly | |
| Long Call Butterfly Vs Bear Call Spread | Long Combo Vs Bear Call Spread | |
| Long Call Butterfly Vs Bear Put Spread | Long Combo Vs Bear Put Spread | |
| Long Call Butterfly Vs Bull Call Spread | Long Combo Vs Bull Call Spread | |
| Long Call Butterfly Vs Bull Put Spread | Long Combo Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Long Call Butterfly 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.
At the same time, if you are in a neutral market situation and want to take a limited risk, then Long Call Butterfly is one of the options trading strategies you can look out for.
The profit you get using this strategy is also limited in scope.
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.
