CALL BACKSPREAD	RISK REVERSAL
About Strategy	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..	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..

CALL BACKSPREAD Vs RISK REVERSAL - Details

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

CALL BACKSPREAD Vs RISK REVERSAL - When & How to use ?

	CALL BACKSPREAD	RISK REVERSAL
Market View	Bullish	Bullish
When to use?	This strategy is used when the investor expects the price of the stock to rise in the future.	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	Sell 1 ITM Call, BUY 2 OTM Call	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 = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss	Premium received - Put Strike Price

CALL BACKSPREAD Vs RISK REVERSAL - Risk & Reward

	CALL BACKSPREAD	RISK REVERSAL
Maximum Profit Scenario	Unlimited profit potential if the stock goes in upward direction.	You have unlimited profit potential to the upside.
Maximum Loss Scenario	Strike Price of long call - Strike Price of short call - Net premium received	You have nearly unlimited downside risk as well because you are short the put
Risk	Limited	Unlimited
Reward	Unlimited	Unlimited

CALL BACKSPREAD Vs RISK REVERSAL - Strategy Pros & Cons

	CALL BACKSPREAD	RISK REVERSAL
Similar Strategies	-	-
Disadvantage		Unlimited Risk.
Advantages	• Unlimited profit potential.	Unlimited profit.