STRIP	RISK REVERSAL
About Strategy	Strip Option Strategy Strip Strategy is the opposite of Strap Strategy. When a trader is bearish on the market and bullish on volatility then he will implement this strategy by buying two ATM Put Options & one ATM Call Option, of the same strike price, expiry date & underlying asset. If the prices move downwards then this strategy will make more profits compared to short straddle because of the 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..

STRIP Vs RISK REVERSAL - Details

	STRIP	RISK REVERSAL
Market View	Neutral	Bullish
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	Unlimited	Unlimited
Risk Profile	Limited	Unlimited
Breakeven Point	Upper Breakeven Point = Strike Price of Calls/Puts + Net Premium Paid, Lower Breakeven Point = Strike Price of Calls/Puts - (Net Premium Paid/2)	Premium received - Put Strike Price

STRIP Vs RISK REVERSAL - When & How to use ?

	STRIP	RISK REVERSAL
Market View	Neutral	Bullish
When to use?	When a trader is bearish on the market and bullish on volatility then he will implement this strategy.	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	Buy 1 ATM Call, Buy 2 ATM Puts	This strategy work when an investor want to hedge their position by buying a put option and selling a call option.
Breakeven Point	Upper Breakeven Point = Strike Price of Calls/Puts + Net Premium Paid, Lower Breakeven Point = Strike Price of Calls/Puts - (Net Premium Paid/2)	Premium received - Put Strike Price

STRIP Vs RISK REVERSAL - Risk & Reward

	STRIP	RISK REVERSAL
Maximum Profit Scenario	Price of Underlying - Strike Price of Calls - Net Premium Paid OR 2 x (Strike Price of Puts - Price of Underlying) - Net Premium Paid	You have unlimited profit potential to the upside.
Maximum Loss Scenario	Net Premium Paid + Commissions Paid	You have nearly unlimited downside risk as well because you are short the put
Risk	Limited	Unlimited
Reward	Unlimited	Unlimited

STRIP Vs RISK REVERSAL - Strategy Pros & Cons

	STRIP	RISK REVERSAL
Similar Strategies	Strap, Short Put Ladder	-
Disadvantage	Expensive., The share price must change significantly to generate profit., High Bid/Offer spread can have a negative influence on the position.	Unlimited Risk.
Advantages	Profit is generated when the share price changes in any direction., Limited loss., The profit is potentially unlimited when share prices are moving.	Unlimited profit.