RISK REVERSAL	LONG STRANGLE
About Strategy	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..	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..

RISK REVERSAL Vs LONG STRANGLE - Details

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

RISK REVERSAL Vs LONG STRANGLE - When & How to use ?

	RISK REVERSAL	LONG STRANGLE
Market View	Bullish	Neutral
When to use?	This strategy can be used for hedging. When an investor want to protect long or short position by using a call and put option.	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	This strategy work when an investor want to hedge their position by buying a put option and selling a call option.	Buy OTM Call Option, Buy OTM Put Option
Breakeven Point	Premium received - Put Strike Price	Lower Breakeven Point = Strike Price of Put - Net Premium, Upper Breakeven Point = Strike Price of Call + Net Premium

RISK REVERSAL Vs LONG STRANGLE - Risk & Reward

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

RISK REVERSAL Vs LONG STRANGLE - Strategy Pros & Cons

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