LONG STRADDLE	STRAP
About Strategy	Long Straddle Option Strategy  Straddle 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 Read more..	Strap Option Strategy  Strap Strategy is similar to Long Straddle, the only difference is the quantity traded. A trader will buy two Call Options and one Put Options. In this strategy, a trader is very bullish on the market and volatility on upside but wants to hedge himself in case the stock doesn’t perform as per his expectations. This strategy will make more profits compared to long straddle sin .. Read more..

LONG STRADDLE Vs STRAP - Details

	LONG STRADDLE	STRAP
Market View	Neutral	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	2	3
Strategy Level	Beginners	Beginners
Reward Profile	Unlimited	Profit Achieved When Price of Underlying > Strike Price of Calls/Puts + (Net Premium Paid/2) OR Price of Underlying < Strike Price of Calls/Puts - Net Premium Paid
Risk Profile	Limited	Max Loss Occurs When Price of Underlying = Strike Price of Calls/Puts
Breakeven Point	Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call + Net Premium	Strike Price of Calls/Puts + (Net Premium Paid/2)

LONG STRADDLE Vs STRAP - When & How to use ?

	LONG STRADDLE	STRAP
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.	This strategy is used when the investor is bullish on the stock and expects volatility in the near future.
Action	Buy Call Option, Buy Put Option	Buy 2 ATM Call Option, Buy 1 ATM Put Option
Breakeven Point	Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call + Net Premium	Strike Price of Calls/Puts + (Net Premium Paid/2)

LONG STRADDLE Vs STRAP - Risk & Reward

	LONG STRADDLE	STRAP
Maximum Profit Scenario	Max profit is achieved when at one option is exercised.	UNLIMITED
Maximum Loss Scenario	Maximum Loss = Net Premium Paid	Net Premium Paid
Risk	Limited	Limited
Reward	Unlimited	Unlimited

LONG STRADDLE Vs STRAP - Strategy Pros & Cons

	LONG STRADDLE	STRAP
Similar Strategies	Bear Put Spread	Strip, Short Put Ladder, Short Call Ladder
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.	• To generate profit, there should be significant change in share price. • Expensive strategy.
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.	• Limited loss. • If share prices are moving then traders can book unlimited profit. • A trader can still book profit if the underlying falls substantially.