LONG PUT	CALL BACKSPREAD
About Strategy	Long Put Option Strategy This strategy is implemented by buying 1 Put Option i.e. a single position, when the person is bearish on the market and expects the market to move downwards in the near future. Risk: The maximum loss will be the premium amount paid.< Read more..	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..

LONG PUT Vs CALL BACKSPREAD - Details

	LONG PUT	CALL BACKSPREAD
Market View	Bearish	Bullish
Type (CE/PE)	PE (Put Option)	CE (Call Option)
Number Of Positions	1	3
Strategy Level	Beginners	Advance
Reward Profile	Unlimited	Unlimited
Risk Profile	Limited	Limited
Breakeven Point	Strike Price of Long Put - Premium Paid	Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss

LONG PUT Vs CALL BACKSPREAD - When & How to use ?

	LONG PUT	CALL BACKSPREAD
Market View	Bearish	Bullish
When to use?	A long put option strategy works well when you're expecting the underlying asset to sharply decline or be volatile in near future.	This strategy is used when the investor expects the price of the stock to rise in the future.
Action	Buy Put Option	Sell 1 ITM Call, BUY 2 OTM Call
Breakeven Point	Strike Price of Long Put - Premium Paid	Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss

LONG PUT Vs CALL BACKSPREAD - Risk & Reward

	LONG PUT	CALL BACKSPREAD
Maximum Profit Scenario	Profit = Strike Price of Long Put - Premium Paid	Unlimited profit potential if the stock goes in upward direction.
Maximum Loss Scenario	Max Loss = Premium Paid + Commissions Paid	Strike Price of long call - Strike Price of short call - Net premium received
Risk	Limited	Limited
Reward	Unlimited	Unlimited

LONG PUT Vs CALL BACKSPREAD - Strategy Pros & Cons

	LONG PUT	CALL BACKSPREAD
Similar Strategies	Protective Call, Short Put	-
Disadvantage	• 100% loss if strike price, expiration dates or underlying stocks are badly chosen. • Time decay.
Advantages	• Limited risk to the premium paid. • Less capital investment and more profit. • Unlimited profit potential with limited risk.	• Unlimited profit potential.