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 Box Vs Short Strangle 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 Box Vs Short Strangle 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 Box Vs Short Strangle comparison:
| Comparison Aspect | Short Strangle | Short Box |
| View |  |  |
| Strategy Introduction | The short strangle options trading strategy is an excellent strategy to be deployed when the investor is expecting little to no volatility in the market...more | Short Box involves selling a bull call spread along with a bear put spread, both at the same strike prices and expiration date, so that both the spreads balance each other out and create an arbitrage...more |
| Investor Obligation | If the prediction does not come out true, the strategy can cause unlimited loss. | Recognize Put Call Parity distrubance as soon as possible and take positions to capture the movement. |
| Market Position | Neutral | Neutral |
| Strategy Level Suitable for | Experts | Experts |
| Options Traded | Call | 1 Short ITM Call, 1 Long OTM Call, 1 Short ITM Put, 1 Long OTM Put |
| Number of Positions | 4 | 4 |
| Action Needed | 1 Short ITM Call, 1 Long ITM Call, 1 Long OTM Call, 1 Short OTM Call | Sell bull call spread along with a Bear put spread |
| Risk for You | Limited | None |
| Profit Potential | Unlimited | Limited |
| Break Even Point for Investor | Lower Breakeven = Lower Strike Price + Net Premium Upper breakeven = Higher Strike Price - Net Premium | Not Required, Almost No Risk/Loss |
| Investor Intention | Stock price remains between the 2 option Strike Prices and the options expire worthlessly | Take Positions at the right time and capture the profit. |
| Investor Expectation | Little or No Market Volatility | Profits generated from the strategy will be enough to compensate for the commissions and brokerages paid |
| Strategy Summary | Profits in Stable Market | Complicated |
| Advantages | Higher Range of Profit | No Capital Needed, Zero Risk |
| Disadvantages | Low Premium, Unlimited Risk | Low Profit |
| Market Scenarios - Profit | 1 | 3 |
| Market Scenarios - Loss | 1 | 0 |
| Also called as | Credit Spread | NA |
| More Comparisons | Short Strangle Vs Short Put | Short Box Vs Short Put |
| Short Strangle Vs Long Combo | Short Box Vs Long Combo | |
| Short Strangle Vs Synthetic Call | Short Box Vs Synthetic Call | |
| Short Strangle Vs Long Put | Short Box Vs Long Put | |
| Short Strangle Vs Long Call | Short Box Vs Long Call | |
| Short Strangle Vs Covered Call | Short Box Vs Covered Call | |
| Short Strangle Vs Covered Put | Short Box Vs Covered Put | |
| Short Strangle Vs Protective Call | Short Box Vs Protective Call | |
| Short Strangle Vs Short Box | Short Box Vs Short Call | |
| Short Strangle Vs Long Call Condor | Short Box Vs Long Call Condor | |
| Short Strangle Vs Short Call Condor | Short Box Vs Short Call Condor | |
| Short Strangle Vs Box Spread | Short Box Vs Box Spread | |
| Short Strangle Vs Short Call | Short Box Vs Short Strangle | |
| Short Strangle Vs Long Strangle | Short Box Vs Long Strangle | |
| Short Strangle Vs Collar Strategy | Short Box Vs Collar Strategy | |
| Short Strangle Vs Long Straddle | Short Box Vs Long Straddle | |
| Short Strangle Vs Short Straddle | Short Box Vs Short Straddle | |
| Short Strangle Vs Long Call Butterfly | Short Box Vs Long Call Butterfly | |
| Short Strangle Vs Short Call Butterfly | Short Box Vs Short Call Butterfly | |
| Short Strangle Vs Bear Call Spread | Short Box Vs Bear Call Spread | |
| Short Strangle Vs Bear Put Spread | Short Box Vs Bear Put Spread | |
| Short Strangle Vs Bull Call Spread | Short Box Vs Bull Call Spread | |
| Short Strangle Vs Bull Put Spread | Short Box Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Short Box Vs Short Strangle option strategies.
Remember, the Short box strategy has no risk but provides a consistent (and limited) profits to your trades. To add to that, it is a relatively complex strategy too.
At the same time, if you are in a neutral market situation and have a limited risk appetite, then Short Strangle is a potential option strategy for you. Generally, this strategy is suitable when you are sure that there is going to be low or no market volatility at all.
Be aware of all the related aspects (like the ones listed above) and then make a choice for yourself.
Furthermore, as said above, it also depends on the market situation.
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