STRAP	SHORT STRANGLE
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..	Short Strangle Option Strategy  This strategy is similar to Short Straddle; the only difference is of the strike prices at which the positions are built. Short Strangle involves selling of one OTM Call Option and selling of one OTM Put Option, of the same expiry date and same underlying asset. Here the probability of making profits is more as there is a spread between the two strike prices, and if .. Read more..

STRAP Vs SHORT STRANGLE - Details

	STRAP	SHORT STRANGLE
Market View	Neutral	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call 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	Limited
Risk Profile	Max Loss Occurs When Price of Underlying = Strike Price of Calls/Puts	Unlimited
Breakeven Point	Strike Price of Calls/Puts + (Net Premium Paid/2)	Lower Break-even = Strike Price of Put - Net Premium, Upper Break-even = Strike Price of Call+ Net Premium

STRAP Vs SHORT STRANGLE - When & How to use ?

	STRAP	SHORT STRANGLE
Market View	Neutral	Neutral
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 perfect in a neutral market scenario when the underlying is expected to be less volatile.
Action	Buy 2 ATM Call Option, Buy 1 ATM Put Option	Sell OTM Call, Sell OTM Put
Breakeven Point	Strike Price of Calls/Puts + (Net Premium Paid/2)	Lower Break-even = Strike Price of Put - Net Premium, Upper Break-even = Strike Price of Call+ Net Premium

STRAP Vs SHORT STRANGLE - Risk & Reward

	STRAP	SHORT STRANGLE
Maximum Profit Scenario	UNLIMITED	Maximum Profit = Net Premium Received
Maximum Loss Scenario	Net Premium Paid	Loss = Price of Underlying - Strike Price of Short Call - Net Premium Received
Risk	Limited	Unlimited
Reward	Unlimited	Limited

STRAP Vs SHORT STRANGLE - Strategy Pros & Cons

	STRAP	SHORT STRANGLE
Similar Strategies	Strip, Short Put Ladder, Short Call Ladder	Short Straddle, Long Strangle
Disadvantage	• To generate profit, there should be significant change in share price. • Expensive strategy.	• Unlimited loss is associated with this strategy, not recommended for beginners. • Limited reward amount.
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.	• Higher chance of profitability due to selling of OTM options. • Advantage from double time decay and a contraction in volatility. • Traders can book profit when underlying asset stays within a tight trading range.