Compare Strategies
LONG STRADDLE | REVERSE IRON CONDOR | |
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About Strategy |
Long Straddle Option StrategyStraddle is neither bullish nor bearish strategy; it is a market neutral strategy. Here a trader wishes to take advantage of the volatility in the market. This strategy involves buying of one Call option and one Put option of the same strike price, same expiry date and of the same underlying asset. Now a trader is bound to make profits once stock moves in either direc |
Reverse Iron Condor Option StrategyReverse Iron Condor as the name suggests is the opposite of Iron Condors. In Reverse Iron Condor, a trader is bullish about volatility and expects the market to make a significant move in the near future in either direction. Here a trader will buy 1 OTM Call Option, sell 1 Deep OTM Call Option, buy 1 OTM Put Option, sell 1 Deep OTM Put Option. This strategy also .. |
LONG STRADDLE Vs REVERSE IRON CONDOR - Details
LONG STRADDLE | REVERSE IRON CONDOR | |
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Market View | Neutral | Neutral |
Type (CE/PE) | CE (Call Option) + PE (Put Option) | CE (Call Option) + PE (Put Option) |
Number Of Positions | 2 | 4 |
Strategy Level | Beginners | Advance |
Reward Profile | Unlimited | Limited |
Risk Profile | Limited | Limited |
Breakeven Point | Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call + Net Premium | Upper Breakeven Point = Strike Price of Long Call + Net Premium Paid, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid |
LONG STRADDLE Vs REVERSE IRON CONDOR - When & How to use ?
LONG STRADDLE | REVERSE IRON CONDOR | |
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Market View | Neutral | Neutral |
When to use? | This options strategy is work well when and investor market view is bearish. The strategy minimizes your risk in the event of prime movements going against your expectations. | In Reverse Iron Condor, a trader is bullish about volatility and expects the market to make a significant move in the near future in either direction |
Action | Buy Call Option, Buy Put Option | Buy 1 OTM Put, Sell 1 OTM Put (Lower Strike), Buy 1 OTM Call, Sell 1 OTM Call (Higher Strike) |
Breakeven Point | Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call + Net Premium | Upper Breakeven Point = Strike Price of Long Call + Net Premium Paid, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid |
LONG STRADDLE Vs REVERSE IRON CONDOR - Risk & Reward
LONG STRADDLE | REVERSE IRON CONDOR | |
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Maximum Profit Scenario | Max profit is achieved when at one option is exercised. | Strike Price of Short Call (or Long Put) - Strike Price of Long Call (or Short Put) - Net Premium Paid - Commissions Paid |
Maximum Loss Scenario | Maximum Loss = Net Premium Paid | Net Premium Paid + Commissions Paid |
Risk | Limited | Limited |
Reward | Unlimited | Limited |
LONG STRADDLE Vs REVERSE IRON CONDOR - Strategy Pros & Cons
LONG STRADDLE | REVERSE IRON CONDOR | |
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Similar Strategies | Bear Put Spread | Short Condor |
Disadvantage | • There should be continuous movement of the stock and options price for this strategy to be profitable. • Time decay hurts long option if the strike price, expiration date or underlying stock are badly chosen. | • Potential loss is higher than gain. • Limited profit. |
Advantages | • Unlimited potential beyond the breakeven point in either direction . • Book your profit from highly volatile stocks without determining the direction. • Limited risk, more profit. | • Able to profit whether stocks move in either direction up or down. • This strategy can be used by option traders who cannot use credit spreads. • Predictable maximum loss and profits. |