LONG STRANGLE	STRAP
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..	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..

LONG STRANGLE Vs STRAP - Details

	LONG STRANGLE	STRAP
Market View	Neutral	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	2	3
Strategy Level	Beginners	Beginners
Reward Profile	Unlimited	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	Limited	Max Loss Occurs When Price of Underlying = Strike Price of Calls/Puts
Breakeven Point	Lower Breakeven Point = Strike Price of Put - Net Premium, Upper Breakeven Point = Strike Price of Call + Net Premium	Strike Price of Calls/Puts + (Net Premium Paid/2)

LONG STRANGLE Vs STRAP - When & How to use ?

	LONG STRANGLE	STRAP
Market View	Neutral	Neutral
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 is used when the investor is bullish on the stock and expects volatility in the near future.
Action	Buy OTM Call Option, Buy OTM Put Option	Buy 2 ATM Call Option, Buy 1 ATM Put Option
Breakeven Point	Lower Breakeven Point = Strike Price of Put - Net Premium, Upper Breakeven Point = Strike Price of Call + Net Premium	Strike Price of Calls/Puts + (Net Premium Paid/2)

LONG STRANGLE Vs STRAP - Risk & Reward

	LONG STRANGLE	STRAP
Maximum Profit Scenario	Profit = Price of Underlying - Strike Price of Long Call - Net Premium Paid	UNLIMITED
Maximum Loss Scenario	Max Loss = Net Premium Paid	Net Premium Paid
Risk	Limited	Limited
Reward	Unlimited	Unlimited

LONG STRANGLE Vs STRAP - Strategy Pros & Cons

	LONG STRANGLE	STRAP
Similar Strategies	Long Straddle, Short Strangle	Strip, Short Put Ladder, Short Call Ladder
Disadvantage	• Require significant price movement to book profit. • Traders can lose more money if the underlying asset stayed stagnant.	• To generate profit, there should be significant change in share price. • Expensive strategy.
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 .	• Limited loss. • If share prices are moving then traders can book unlimited profit. • A trader can still book profit if the underlying falls substantially.