STRAP	SHORT CALL
About Strategy	Strap Option Strategy  Strap Strategy is similar to Long Straddle, the only difference is the quantity traded. A trader will buy two Call Options and one Put Options. In this strategy, a trader is very bullish on the market and volatility on upside but wants to hedge himself in case the stock doesn’t perform as per his expectations. This strategy will make more profits compared to long straddle sin Read more..	Short Call Option Strategy A trader shorts or writes a Call Option when he feels that underlying stock price is likely to go down. Selling Call Option is a strategy preferred for experienced traders. However this strategy is very risky in nature. If the stock rallies on the upside, your risk becomes potentially unquantifiable and unlimited. If the strategy .. Read more..

STRAP Vs SHORT CALL - Details

	STRAP	SHORT CALL
Market View	Neutral	Bearish
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option)
Number Of Positions	3	1
Strategy Level	Beginners	Advance
Reward Profile	Profit Achieved When Price of Underlying > Strike Price of Calls/Puts + (Net Premium Paid/2) OR Price of Underlying < Strike Price of Calls/Puts - Net Premium Paid	Limited
Risk Profile	Max Loss Occurs When Price of Underlying = Strike Price of Calls/Puts	Unlimited
Breakeven Point	Strike Price of Calls/Puts + (Net Premium Paid/2)	Strike Price of Short Call + Premium Received

STRAP Vs SHORT CALL - When & How to use ?

	STRAP	SHORT CALL
Market View	Neutral	Bearish
When to use?	This strategy is used when the investor is bullish on the stock and expects volatility in the near future.	It is an aggressive strategy and involves huge risks. It should be used only in case where trader is certain about the bearish market view on the underlying.
Action	Buy 2 ATM Call Option, Buy 1 ATM Put Option	Sell or Write Call Option
Breakeven Point	Strike Price of Calls/Puts + (Net Premium Paid/2)	Strike Price of Short Call + Premium Received

STRAP Vs SHORT CALL - Risk & Reward

	STRAP	SHORT CALL
Maximum Profit Scenario	UNLIMITED	Max Profit = Premium Received
Maximum Loss Scenario	Net Premium Paid	Loss Occurs When Price of Underlying > Strike Price of Short Call + Premium Received
Risk	Limited	Unlimited
Reward	Unlimited	Limited

STRAP Vs SHORT CALL - Strategy Pros & Cons

	STRAP	SHORT CALL
Similar Strategies	Strip, Short Put Ladder, Short Call Ladder	Covered Put, Covered Calls
Disadvantage	• To generate profit, there should be significant change in share price. • Expensive strategy.	• Unlimited risk to the upside underlying stocks. • Potential loss more than the premium collected.
Advantages	• Limited loss. • If share prices are moving then traders can book unlimited profit. • A trader can still book profit if the underlying falls substantially.	• With the help of this strategy, traders can book profit from falling prices in the underlying asset. • Less investment, more profit. • Traders can book profit when underlying stock price fall, move sideways or rise by a small amount.