CALL BACKSPREAD	SHORT STRANGLE
About Strategy	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..	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..

CALL BACKSPREAD Vs SHORT STRANGLE - Details

	CALL BACKSPREAD	SHORT STRANGLE
Market View	Bullish	Neutral
Type (CE/PE)	CE (Call Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	3	2
Strategy Level	Advance	Advance
Reward Profile	Unlimited	Limited
Risk Profile	Limited	Unlimited
Breakeven Point	Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss	Lower Break-even = Strike Price of Put - Net Premium, Upper Break-even = Strike Price of Call+ Net Premium

CALL BACKSPREAD Vs SHORT STRANGLE - When & How to use ?

	CALL BACKSPREAD	SHORT STRANGLE
Market View	Bullish	Neutral
When to use?	This strategy is used when the investor expects the price of the stock to rise in the future.	This strategy is perfect in a neutral market scenario when the underlying is expected to be less volatile.
Action	Sell 1 ITM Call, BUY 2 OTM Call	Sell OTM Call, Sell OTM Put
Breakeven Point	Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss	Lower Break-even = Strike Price of Put - Net Premium, Upper Break-even = Strike Price of Call+ Net Premium

CALL BACKSPREAD Vs SHORT STRANGLE - Risk & Reward

	CALL BACKSPREAD	SHORT STRANGLE
Maximum Profit Scenario	Unlimited profit potential if the stock goes in upward direction.	Maximum Profit = Net Premium Received
Maximum Loss Scenario	Strike Price of long call - Strike Price of short call - Net premium received	Loss = Price of Underlying - Strike Price of Short Call - Net Premium Received
Risk	Limited	Unlimited
Reward	Unlimited	Limited

CALL BACKSPREAD Vs SHORT STRANGLE - Strategy Pros & Cons

	CALL BACKSPREAD	SHORT STRANGLE
Similar Strategies	-	Short Straddle, Long Strangle
Disadvantage		• Unlimited loss is associated with this strategy, not recommended for beginners. • Limited reward amount.
Advantages	• Unlimited profit potential.	• 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.