STRAP	PROTECTIVE 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..	Protective Call Option Strategy This strategy is simply the reversal of the Synthetic Call Strategy. This strategy is implemented when a trader is bearish on the market and expects to go down. Trader will short underlying stock in the cash market and buy either an ATM Call Option or OTM Call Option. The Call Option is bought to protect / hedge the upside risk on the short position. The .. Read more..

STRAP Vs PROTECTIVE CALL - Details

	STRAP	PROTECTIVE 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	Beginners
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	Unlimited
Risk Profile	Max Loss Occurs When Price of Underlying = Strike Price of Calls/Puts	Limited
Breakeven Point	Strike Price of Calls/Puts + (Net Premium Paid/2)	Sale Price of Underlying + Premium Paid

STRAP Vs PROTECTIVE CALL - When & How to use ?

	STRAP	PROTECTIVE 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.	This strategy is implemented when a trader is bearish on the market and expects to go down.
Action	Buy 2 ATM Call Option, Buy 1 ATM Put Option	Buy 1 ATM Call
Breakeven Point	Strike Price of Calls/Puts + (Net Premium Paid/2)	Sale Price of Underlying + Premium Paid

STRAP Vs PROTECTIVE CALL - Risk & Reward

	STRAP	PROTECTIVE CALL
Maximum Profit Scenario	UNLIMITED	Sale Price of Underlying - Price of Underlying - Premium Paid
Maximum Loss Scenario	Net Premium Paid	Premium Paid + Call Strike Price - Sale Price of Underlying + Commissions Paid
Risk	Limited	Limited
Reward	Unlimited	Unlimited

STRAP Vs PROTECTIVE CALL - Strategy Pros & Cons

	STRAP	PROTECTIVE CALL
Similar Strategies	Strip, Short Put Ladder, Short Call Ladder	Put Backspread, Long Put
Disadvantage	• To generate profit, there should be significant change in share price. • Expensive strategy.	• Profitable when market moves as expected. • Not good for beginners.
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.	• Limited risk if the market moves in opposite direction as expected. • Allows you to keep open a profitable position to make further profits. • Unlimited profit potential.