LONG STRANGLE	CALL BACKSPREAD
About Strategy	Long Strangle Option Strategy A Strangle is similar to Straddle. In Strangle, a trader will purchase one OTM Call Option and one OTM Put Option, of the same expiry date and the same underlying asset. This strategy will reduce the entry cost for trader and it is also cheaper than straddle. A trader will make profits, if the market moves sharply in either direction and gives extra-ordinary returns in the Read more..	Call Backspread Option Trading  This strategy is adopted by traders who are bullish in nature. He expects market and volatility to rise in the near future. A trader need not be direction specific here (i.e. an upward or downward trend, but a small bias towards an uptrend should always be present, as the gains will be much higher once the market moves up r .. Read more..

LONG STRANGLE Vs CALL BACKSPREAD - Details

	LONG STRANGLE	CALL BACKSPREAD
Market View	Neutral	Bullish
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option)
Number Of Positions	2	3
Strategy Level	Beginners	Advance
Reward Profile	Unlimited	Unlimited
Risk Profile	Limited	Limited
Breakeven Point	Lower Breakeven Point = Strike Price of Put - Net Premium, Upper Breakeven Point = Strike Price of Call + Net Premium	Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss

LONG STRANGLE Vs CALL BACKSPREAD - When & How to use ?

	LONG STRANGLE	CALL BACKSPREAD
Market View	Neutral	Bullish
When to use?	This strategy is used in special scenarios where you foresee a lot of volatility in the market due to election results, budget, policy change, annual result announcements etc.	This strategy is used when the investor expects the price of the stock to rise in the future.
Action	Buy OTM Call Option, Buy OTM Put Option	Sell 1 ITM Call, BUY 2 OTM Call
Breakeven Point	Lower Breakeven Point = Strike Price of Put - Net Premium, Upper Breakeven Point = Strike Price of Call + Net Premium	Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss

LONG STRANGLE Vs CALL BACKSPREAD - Risk & Reward

	LONG STRANGLE	CALL BACKSPREAD
Maximum Profit Scenario	Profit = Price of Underlying - Strike Price of Long Call - Net Premium Paid	Unlimited profit potential if the stock goes in upward direction.
Maximum Loss Scenario	Max Loss = Net Premium Paid	Strike Price of long call - Strike Price of short call - Net premium received
Risk	Limited	Limited
Reward	Unlimited	Unlimited

LONG STRANGLE Vs CALL BACKSPREAD - Strategy Pros & Cons

	LONG STRANGLE	CALL BACKSPREAD
Similar Strategies	Long Straddle, Short Strangle	-
Disadvantage	• Require significant price movement to book profit. • Traders can lose more money if the underlying asset stayed stagnant.
Advantages	• Able to book profit, no matter if the underlying asset goes in either direction. • Limited loss to the debit paid. • If the underlying asset continues to move in one direction then you can book Unlimited profit .	• Unlimited profit potential.