SHORT STRANGLE	STRAP
About Strategy	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 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 Vs STRAP - Details

	SHORT 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	Advance	Beginners
Reward Profile	Limited	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	Unlimited	Max Loss Occurs When Price of Underlying = Strike Price of Calls/Puts
Breakeven Point	Lower Break-even = Strike Price of Put - Net Premium, Upper Break-even = Strike Price of Call+ Net Premium	Strike Price of Calls/Puts + (Net Premium Paid/2)

SHORT STRANGLE Vs STRAP - When & How to use ?

	SHORT STRANGLE	STRAP
Market View	Neutral	Neutral
When to use?	This strategy is perfect in a neutral market scenario when the underlying is expected to be less volatile.	This strategy is used when the investor is bullish on the stock and expects volatility in the near future.
Action	Sell OTM Call, Sell OTM Put	Buy 2 ATM Call Option, Buy 1 ATM Put Option
Breakeven Point	Lower Break-even = Strike Price of Put - Net Premium, Upper Break-even = Strike Price of Call+ Net Premium	Strike Price of Calls/Puts + (Net Premium Paid/2)

SHORT STRANGLE Vs STRAP - Risk & Reward

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

SHORT STRANGLE Vs STRAP - Strategy Pros & Cons

	SHORT STRANGLE	STRAP
Similar Strategies	Short Straddle, Long Strangle	Strip, Short Put Ladder, Short Call Ladder
Disadvantage	• Unlimited loss is associated with this strategy, not recommended for beginners. • Limited reward amount.	• To generate profit, there should be significant change in share price. • Expensive strategy.
Advantages	• 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.	• Limited loss. • If share prices are moving then traders can book unlimited profit. • A trader can still book profit if the underlying falls substantially.