SHORT STRANGLE	LONG COMBO
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..	Long Combo Option Strategy  Long Combo Option Trading Strategy is implemented when a trader is bullish in nature and expects the stock price to rise in the near future. Here a trader will sell one ‘Out of the Money’ Put Option and buy one ‘Out of the Money’ Call Option. This trade will require less capital to implement since the amount required to buy the call will be covered by the amount received .. Read more..

SHORT STRANGLE Vs LONG COMBO - Details

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

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

	SHORT STRANGLE	LONG COMBO
Market View	Neutral	Bullish
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 an investor Bullish on an underlying but don't have the required capital or the risk appetite to invest directly into it.
Action	Sell OTM Call, Sell OTM Put	Sell OTM Put Option, Buy OTM Call Option
Breakeven Point	Lower Break-even = Strike Price of Put - Net Premium, Upper Break-even = Strike Price of Call+ Net Premium	Call Strike + Net Premium

SHORT STRANGLE Vs LONG COMBO - Risk & Reward

	SHORT STRANGLE	LONG COMBO
Maximum Profit Scenario	Maximum Profit = Net Premium Received	Underlying asset goes up and Call option exercised
Maximum Loss Scenario	Loss = Price of Underlying - Strike Price of Short Call - Net Premium Received	Underlying asset goes down and Put option exercised
Risk	Unlimited	Unlimited
Reward	Limited	Unlimited

SHORT STRANGLE Vs LONG COMBO - Strategy Pros & Cons

	SHORT STRANGLE	LONG COMBO
Similar Strategies	Short Straddle, Long Strangle	-
Disadvantage	• Unlimited loss is associated with this strategy, not recommended for beginners. • Limited reward amount.	• Losses can keep on increasing as the price of stock goes down. • High risk 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.	• Capital investment is low and returns are high. • Unlimited reward, returns keep on increasing with the increase on stock price. • Leverage facility provided by this strategy is very beneficial.