LONG STRANGLE	RISK REVERSAL
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..	Risk Reversal Option Strategy This strategy protects an investor from unfavourable price movements in the position but limits the profits can be made on that position. A risk reversal is a hedging strategy that protects a long or short position by using put and call options. In this one option is buying and other is written. In this strategy the trader has to pay a premium, while the written option prod .. Read more..

LONG STRANGLE Vs RISK REVERSAL - Details

	LONG STRANGLE	RISK REVERSAL
Market View	Neutral	Bullish
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	2	2
Strategy Level	Beginners	Advance
Reward Profile	Unlimited	Unlimited
Risk Profile	Limited	Unlimited
Breakeven Point	Lower Breakeven Point = Strike Price of Put - Net Premium, Upper Breakeven Point = Strike Price of Call + Net Premium	Premium received - Put Strike Price

LONG STRANGLE Vs RISK REVERSAL - When & How to use ?

	LONG STRANGLE	RISK REVERSAL
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 can be used for hedging. When an investor want to protect long or short position by using a call and put option.
Action	Buy OTM Call Option, Buy OTM Put Option	This strategy work when an investor want to hedge their position by buying a put option and selling a call option.
Breakeven Point	Lower Breakeven Point = Strike Price of Put - Net Premium, Upper Breakeven Point = Strike Price of Call + Net Premium	Premium received - Put Strike Price

LONG STRANGLE Vs RISK REVERSAL - Risk & Reward

	LONG STRANGLE	RISK REVERSAL
Maximum Profit Scenario	Profit = Price of Underlying - Strike Price of Long Call - Net Premium Paid	You have unlimited profit potential to the upside.
Maximum Loss Scenario	Max Loss = Net Premium Paid	You have nearly unlimited downside risk as well because you are short the put
Risk	Limited	Unlimited
Reward	Unlimited	Unlimited

LONG STRANGLE Vs RISK REVERSAL - Strategy Pros & Cons

	LONG STRANGLE	RISK REVERSAL
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.	Unlimited Risk.
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.