STRAP	CALL BACKSPREAD
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..	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..

STRAP Vs CALL BACKSPREAD - Details

	STRAP	CALL BACKSPREAD
Market View	Neutral	Bullish
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option)
Number Of Positions	3	3
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	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)	Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss

STRAP Vs CALL BACKSPREAD - When & How to use ?

	STRAP	CALL BACKSPREAD
Market View	Neutral	Bullish
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 used when the investor expects the price of the stock to rise in the future.
Action	Buy 2 ATM Call Option, Buy 1 ATM Put Option	Sell 1 ITM Call, BUY 2 OTM Call
Breakeven Point	Strike Price of Calls/Puts + (Net Premium Paid/2)	Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss

STRAP Vs CALL BACKSPREAD - Risk & Reward

	STRAP	CALL BACKSPREAD
Maximum Profit Scenario	UNLIMITED	Unlimited profit potential if the stock goes in upward direction.
Maximum Loss Scenario	Net Premium Paid	Strike Price of long call - Strike Price of short call - Net premium received
Risk	Limited	Limited
Reward	Unlimited	Unlimited

STRAP Vs CALL BACKSPREAD - Strategy Pros & Cons

	STRAP	CALL BACKSPREAD
Similar Strategies	Strip, Short Put Ladder, Short Call Ladder	-
Disadvantage	• To generate profit, there should be significant change in share price. • Expensive strategy.
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.	• Unlimited profit potential.