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 Straddle 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 Straddle 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 Straddle Vs Long Combo comparison:
| Comparison Aspect | Long Combo | Short Straddle |
| View |  |  |
| Strategy Introduction | 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 | Using the short straddle strategy, the investor makes an upfront gain through the premiums collected by writing the call and put options. The investor expects that there...more |
| Investor Obligation | The strategy expects low initial investment, however, the trader needs to pay the premium on the trades irrespective of the trade result. | The investor must hold strong views of the steadiness in the market to be involved in the short straddle. |
| Market Position | Bullish | Neutral |
| Strategy Level Suitable for | Intermediates | Experts |
| Options Traded | Put, Call | Call, Put |
| Number of Positions | 2 | 2 |
| Action Needed | Sell One OTM Put, Buy One OTM Call | 1 ATM Call, 1 ATM Put |
| Risk for You | Unlimited | Unlimited |
| Profit Potential | Unlimited | Limited |
| Break Even Point for Investor | Call Strike + Net Premium | Lower Breakeven = Strike Price of Put - Net Premium Upper breakeven = Strike Price of Call+ Net Premium |
| Investor Intention | Low Upfront Investments, High ROI | Let Options Expire Worthlessly |
| Investor Expectation | Price of Stocks Go Up | No Market Movement |
| Strategy Summary | Complex | Complex |
| Advantages | Low Upfront Investment, Unlimited Profits | Profits in Zero Market Volatility Situation |
| Disadvantages | Unlimited Loss, High Premium | Limited Profit, Unlimited Risk |
| Market Scenarios - Profit | 1 | 1 |
| Market Scenarios - Loss | 1 | 2 |
| Also called as | NA | NA |
| More Comparisons | Long Combo Vs Short Put | Short Straddle Vs Short Put |
| Long Combo Vs Long Put | Short Straddle Vs Long Combo | |
| Long Combo Vs Synthetic Call | Short Straddle Vs Synthetic Call | |
| Long Combo Vs Short Call | Short Straddle Vs Long Put | |
| Long Combo Vs Long Call | Short Straddle Vs Long Call | |
| Long Combo Vs Covered Call | Short Straddle Vs Covered Call | |
| Long Combo Vs Covered Put | Short Straddle Vs Covered Put | |
| Long Combo Vs Protective Call | Short Straddle Vs Protective Call | |
| Long Combo Vs Short Box | Short Straddle Vs Short Box | |
| Long Combo Vs Long Call Condor | Short Straddle Vs Long Call Condor | |
| Long Combo Vs Short Call Condor | Short Straddle Vs Short Call Condor | |
| Long Combo Vs Box Spread | Short Straddle Vs Box Spread | |
| Long Combo Vs Short Strangle | Short Straddle Vs Short Strangle | |
| Long Combo Vs Long Strangle | Short Straddle Vs Long Strangle | |
| Long Combo Vs Collar Strategy | Short Straddle Vs Collar Strategy | |
| Long Combo Vs Long Straddle | Short Straddle Vs Long Straddle | |
| Long Combo Vs Short Straddle | Short Straddle Vs Short Call | |
| Long Combo Vs Long Call Butterfly | Short Straddle Vs Long Call Butterfly | |
| Long Combo Vs Short Call Butterfly | Short Straddle Vs Short Call Butterfly | |
| Long Combo Vs Bear Call Spread | Short Straddle Vs Bear Call Spread | |
| Long Combo Vs Bear Put Spread | Short Straddle Vs Bear Put Spread | |
| Long Combo Vs Bull Call Spread | Short Straddle Vs Bull Put Spread | |
| Long Combo Vs Bull Put Spread | Short Straddle Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Short Straddle Vs Long Combo option strategies.
At the same time, if you are an experienced trader and are in a neutral market situation, then Short Straddle is one of the options you can look out for.
There is a high amount of risk involved as well – thus, you have to be very sure of the point that the market has no volatility. Otherwise, stakes can be very high.
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.
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.
