CALL BACKSPREAD	STRAP
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..	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..

CALL BACKSPREAD Vs STRAP - Details

	CALL BACKSPREAD	STRAP
Market View	Bullish	Neutral
Type (CE/PE)	CE (Call Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	3	3
Strategy Level	Advance	Beginners
Reward Profile	Unlimited	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	Limited	Max Loss Occurs When Price of Underlying = Strike Price of Calls/Puts
Breakeven Point	Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss	Strike Price of Calls/Puts + (Net Premium Paid/2)

CALL BACKSPREAD Vs STRAP - When & How to use ?

	CALL BACKSPREAD	STRAP
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 used when the investor is bullish on the stock and expects volatility in the near future.
Action	Sell 1 ITM Call, BUY 2 OTM Call	Buy 2 ATM Call Option, Buy 1 ATM Put Option
Breakeven Point	Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss	Strike Price of Calls/Puts + (Net Premium Paid/2)

CALL BACKSPREAD Vs STRAP - Risk & Reward

	CALL BACKSPREAD	STRAP
Maximum Profit Scenario	Unlimited profit potential if the stock goes in upward direction.	UNLIMITED
Maximum Loss Scenario	Strike Price of long call - Strike Price of short call - Net premium received	Net Premium Paid
Risk	Limited	Limited
Reward	Unlimited	Unlimited

CALL BACKSPREAD Vs STRAP - Strategy Pros & Cons

	CALL BACKSPREAD	STRAP
Similar Strategies	-	Strip, Short Put Ladder, Short Call Ladder
Disadvantage		• To generate profit, there should be significant change in share price. • Expensive strategy.
Advantages	• Unlimited profit potential.	• Limited loss. • If share prices are moving then traders can book unlimited profit. • A trader can still book profit if the underlying falls substantially.