CALL BACKSPREAD	LONG STRANGLE
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..	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..

CALL BACKSPREAD Vs LONG STRANGLE - Details

	CALL BACKSPREAD	LONG STRANGLE
Market View	Bullish	Neutral
Type (CE/PE)	CE (Call Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	3	2
Strategy Level	Advance	Beginners
Reward Profile	Unlimited	Unlimited
Risk Profile	Limited	Limited
Breakeven Point	Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss	Lower Breakeven Point = Strike Price of Put - Net Premium, Upper Breakeven Point = Strike Price of Call + Net Premium

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

	CALL BACKSPREAD	LONG STRANGLE
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 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 1 ITM Call, BUY 2 OTM Call	Buy OTM Call Option, Buy OTM Put Option
Breakeven Point	Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss	Lower Breakeven Point = Strike Price of Put - Net Premium, Upper Breakeven Point = Strike Price of Call + Net Premium

CALL BACKSPREAD Vs LONG STRANGLE - Risk & Reward

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

CALL BACKSPREAD Vs LONG STRANGLE - Strategy Pros & Cons

	CALL BACKSPREAD	LONG STRANGLE
Similar Strategies	-	Long Straddle, Short Strangle
Disadvantage		• Require significant price movement to book profit. • Traders can lose more money if the underlying asset stayed stagnant.
Advantages	• Unlimited profit potential.	• 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 .