SYNTHETIC LONG CALL	RISK REVERSAL
About Strategy	Synthetic Long Call Option Strategy A trader is bullish in nature for short term, but also fearful about the downside risk associated with it. Here, a trader wants to hold an underlying asset either in physical form like in case of commodities or demat (electronic) form in case of stocks. But he is always exposed to downside risk and in order to mitigate his losses, 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..

SYNTHETIC LONG CALL Vs RISK REVERSAL - Details

	SYNTHETIC LONG CALL	RISK REVERSAL
Market View	Bullish	Bullish
Type (CE/PE)	CE (Call Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	2	2
Strategy Level	Beginners	Advance
Reward Profile	When Price of Underlying > Purchase Price of Underlying + Premium Paid	Unlimited
Risk Profile	Limited (Maximum loss happens when the price of instrument move above from the strike price of put)	Unlimited
Breakeven Point	Underlying Price + Put Premium	Premium received - Put Strike Price

SYNTHETIC LONG CALL Vs RISK REVERSAL - When & How to use ?

	SYNTHETIC LONG CALL	RISK REVERSAL
Market View	Bullish	Bullish
When to use?	A trader is bullish in nature for short term, but also fearful about the downside risk associated with it.	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 1 ATM Put or OTM Put	This strategy work when an investor want to hedge their position by buying a put option and selling a call option.
Breakeven Point	Underlying Price + Put Premium	Premium received - Put Strike Price

SYNTHETIC LONG CALL Vs RISK REVERSAL - Risk & Reward

	SYNTHETIC LONG CALL	RISK REVERSAL
Maximum Profit Scenario	Current Price - Purchase Price - Premium Paid	You have unlimited profit potential to the upside.
Maximum Loss Scenario	Premium Paid	You have nearly unlimited downside risk as well because you are short the put
Risk	Limited	Unlimited
Reward	Unlimited	Unlimited

SYNTHETIC LONG CALL Vs RISK REVERSAL - Strategy Pros & Cons

	SYNTHETIC LONG CALL	RISK REVERSAL
Similar Strategies	Protective Put, Long Call	-
Disadvantage	•Chances of loss if the underlying goes down. •Incur losses if option is exercised.	Unlimited Risk.
Advantages	•Limited risk, unlimited profit. •Protection to your long-term holdings. • Limited loss to the to the premium paid for Put option.	Unlimited profit.