SHORT STRADDLE	RISK REVERSAL
About Strategy	Short Straddle Option strategy This strategy is just the opposite of Long Straddle. A trader should adopt this strategy when he expects less volatility in the near future. Here, a trader will sell one Call Option & one Put Option of the same strike price, same expiry date and of the same underlying asset. If the stock/index hovers around the same levels then both the options will expire worthless an Read more..	Risk Reversal Option Strategy This strategy protects an investor from unfavourable price movements in the position but limits the profits can be made on that position. A risk reversal is a hedging strategy that protects a long or short position by using put and call options. In this one option is buying and other is written. In this strategy the trader has to pay a premium, while the written option prod .. Read more..

SHORT STRADDLE Vs RISK REVERSAL - Details

	SHORT STRADDLE	RISK REVERSAL
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 Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call+ Net Premium	Premium received - Put Strike Price

SHORT STRADDLE Vs RISK REVERSAL - When & How to use ?

	SHORT STRADDLE	RISK REVERSAL
Market View	Neutral	Bullish
When to use?	This strategy is work well when an investor expect a flat market in the coming days with very less movement in the prices of underlying asset.	This strategy can be used for hedging. When an investor want to protect long or short position by using a call and put option.
Action	Sell Call Option, Sell Put Option	This strategy work when an investor want to hedge their position by buying a put option and selling a call option.
Breakeven Point	Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call+ Net Premium	Premium received - Put Strike Price

SHORT STRADDLE Vs RISK REVERSAL - Risk & Reward

	SHORT STRADDLE	RISK REVERSAL
Maximum Profit Scenario	Max Profit = Net Premium Received - Commissions Paid	You have unlimited profit potential to the upside.
Maximum Loss Scenario	Maximum Loss = Long Call Strike Price - Short Call Strike Price - Net Premium Received	You have nearly unlimited downside risk as well because you are short the put
Risk	Unlimited	Unlimited
Reward	Limited	Unlimited

SHORT STRADDLE Vs RISK REVERSAL - Strategy Pros & Cons

	SHORT STRADDLE	RISK REVERSAL
Similar Strategies	Short Strangle	-
Disadvantage	• Unlimited risk. • If the price of the underlying asset moves in either direction then huge losses can occur.	Unlimited Risk.
Advantages	• A trader can earn profit even when there is no volatility in the market . • Allows you to benefit from double time decay. • Trader can collect premium from puts and calls option .	Unlimited profit.