SHORT PUT	LONG STRANGLE
About Strategy	Short Put Option Strategy A trader will short put if he is bullish in nature and expects the underlying asset not to fall below a certain level. Risk: Losses will be potentially unlimited if the stock skyrockets above the strike price of put. Read more..	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..

SHORT PUT Vs LONG STRANGLE - Details

	SHORT PUT	LONG STRANGLE
Market View	Bullish	Neutral
Type (CE/PE)	PE (Put Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	1	2
Strategy Level	Beginners	Beginners
Reward Profile	Limited	Unlimited
Risk Profile	Unlimited	Limited
Breakeven Point	Strike Price - Premium	Lower Breakeven Point = Strike Price of Put - Net Premium, Upper Breakeven Point = Strike Price of Call + Net Premium

SHORT PUT Vs LONG STRANGLE - When & How to use ?

	SHORT PUT	LONG STRANGLE
Market View	Bullish	Neutral
When to use?	This strategy works well when you're Bullish that the price of the underlying will not fall beyond a certain level.	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.
Action	Sell Put Option	Buy OTM Call Option, Buy OTM Put Option
Breakeven Point	Strike Price - Premium	Lower Breakeven Point = Strike Price of Put - Net Premium, Upper Breakeven Point = Strike Price of Call + Net Premium

SHORT PUT Vs LONG STRANGLE - Risk & Reward

	SHORT PUT	LONG STRANGLE
Maximum Profit Scenario	Premium received in your account when you sell the Put Option.	Profit = Price of Underlying - Strike Price of Long Call - Net Premium Paid
Maximum Loss Scenario	Unlimited (When the price of the underlying falls.)	Max Loss = Net Premium Paid
Risk	Unlimited	Limited
Reward	Limited	Unlimited

SHORT PUT Vs LONG STRANGLE - Strategy Pros & Cons

	SHORT PUT	LONG STRANGLE
Similar Strategies	Bull Put Spread, Short Starddle	Long Straddle, Short Strangle
Disadvantage	• Unlimited risk. • Huge losses if the price of the underlying stock falls steeply.	• Require significant price movement to book profit. • Traders can lose more money if the underlying asset stayed stagnant.
Advantages	• Benefit from time decay. • Less capital required than buying the stock outright. • Profit when underlying stock price rise, move sideways or drop by a relatively small account.	• 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 .