STRAP	PUT 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..	Put Backspread Option Strategy If the trader is bearish on market and bullish in volatility, he will implement this strategy. However the trader can be neutral in nature i.e. indifferent if the market moves in either of the direction, this strategy will make profits, but uptrend will give a capped income than downtrend which will give unlimited returns. Read more..

STRAP Vs PUT BACKSPREAD - Details

	STRAP	PUT BACKSPREAD
Market View	Neutral	Bearish
Type (CE/PE)	CE (Call Option) + PE (Put Option)	PE (Put Option)
Number Of Positions	3	2
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
Risk Profile	Max Loss Occurs When Price of Underlying = Strike Price of Calls/Puts
Breakeven Point	Strike Price of Calls/Puts + (Net Premium Paid/2)

STRAP Vs PUT BACKSPREAD - When & How to use ?

	STRAP	PUT BACKSPREAD
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.
Action	Buy 2 ATM Call Option, Buy 1 ATM Put Option
Breakeven Point	Strike Price of Calls/Puts + (Net Premium Paid/2)

STRAP Vs PUT BACKSPREAD - Risk & Reward

	STRAP	PUT BACKSPREAD
Maximum Profit Scenario	UNLIMITED
Maximum Loss Scenario	Net Premium Paid
Risk	Limited	Limited
Reward	Unlimited	Unlimited

STRAP Vs PUT BACKSPREAD - Strategy Pros & Cons

	STRAP	PUT 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.