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 Vs Long Call options trading strategies, we will be looking at the below-mentioned aspects and more:
Current Market Position
Your Risk Appetite
Your Trading Experience
Intention and Expectation of a trader
Break-even point of your trade
Apart from the Short Call Vs Long Call 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 Vs Long Call comparison:
Short Call is used when the trader expects that the price of the underlying asset will go down sharply, he shorts a call. If the price of the asset goes down, the strategy generates profit. However, if the price...more
In Long Call Strategy, the trader enters into a contract to buy a call option when he is bullish towards the market. The trader anticipates that the price of the security will go up in the future. However, he does not want to take the risk of buying the security outright...more
The trader has the obligation to buy the stock at the predetermined price at the time of expiration.
The trader has the right to buy a security at a future date at a predefined price. The term long itself means buying a security or buying an option.
Strategy Level Suitable for
Number of Positions
Sell Call Option
Buy Call Option
Risk for You
Limited to Premium
Break Even Point for Investor
Strike Price PLUS Premium
Strike Price PLUS Premium
Let Options Expire Worthlessly
Exercise Option if Profitable, Let it go otherwise
Thus, with this, we wrap up our comparison on Short Call Vs Long Call option strategies.
As mentioned above, if you are looking to put minimal initial investment and have a high-risk appetite, then Short Call options strategy can work wonders for you.
As mentioned above, if you are in a Bullish market situation and want to make unlimited profits on your trades, then Long Call is one of the options trading strategies you can opt for. The risk involved in this strategy is more than limited and thus, the strategy can only work for higher profits if you have the experience to run similar strategies in the past.
Furthermore, as said above, it also depends on the market situation.
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