LONG STRADDLE	RISK REVERSAL
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..	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 STRADDLE Vs RISK REVERSAL - Details

	LONG 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	Beginners	Advance
Reward Profile	Unlimited	Unlimited
Risk Profile	Limited	Unlimited
Breakeven Point	Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call + Net Premium	Premium received - Put Strike Price

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

	LONG STRADDLE	RISK REVERSAL
Market View	Neutral	Bullish
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 can be used for hedging. When an investor want to protect long or short position by using a call and put option.
Action	Buy Call Option, Buy 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

LONG STRADDLE Vs RISK REVERSAL - Risk & Reward

	LONG STRADDLE	RISK REVERSAL
Maximum Profit Scenario	Max profit is achieved when at one option is exercised.	You have unlimited profit potential to the upside.
Maximum Loss Scenario	Maximum Loss = Net Premium Paid	You have nearly unlimited downside risk as well because you are short the put
Risk	Limited	Unlimited
Reward	Unlimited	Unlimited

LONG STRADDLE Vs RISK REVERSAL - Strategy Pros & Cons

	LONG STRADDLE	RISK REVERSAL
Similar Strategies	Bear Put Spread	-
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.	Unlimited Risk.
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.	Unlimited profit.