RISK REVERSAL	SHORT 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..	Short Strangle Option Strategy  This strategy is similar to Short Straddle; the only difference is of the strike prices at which the positions are built. Short Strangle involves selling of one OTM Call Option and selling of one OTM Put Option, of the same expiry date and same underlying asset. Here the probability of making profits is more as there is a spread between the two strike prices, and if .. Read more..

RISK REVERSAL Vs SHORT STRANGLE - Details

	RISK REVERSAL	SHORT 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	Advance
Reward Profile	Unlimited	Limited
Risk Profile	Unlimited	Unlimited
Breakeven Point	Premium received - Put Strike Price	Lower Break-even = Strike Price of Put - Net Premium, Upper Break-even = Strike Price of Call+ Net Premium

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

	RISK REVERSAL	SHORT 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 perfect in a neutral market scenario when the underlying is expected to be less volatile.
Action	This strategy work when an investor want to hedge their position by buying a put option and selling a call option.	Sell OTM Call, Sell OTM Put
Breakeven Point	Premium received - Put Strike Price	Lower Break-even = Strike Price of Put - Net Premium, Upper Break-even = Strike Price of Call+ Net Premium

RISK REVERSAL Vs SHORT STRANGLE - Risk & Reward

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

RISK REVERSAL Vs SHORT STRANGLE - Strategy Pros & Cons

	RISK REVERSAL	SHORT STRANGLE
Similar Strategies	-	Short Straddle, Long Strangle
Disadvantage	Unlimited Risk.	• Unlimited loss is associated with this strategy, not recommended for beginners. • Limited reward amount.
Advantages	Unlimited profit.	• Higher chance of profitability due to selling of OTM options. • Advantage from double time decay and a contraction in volatility. • Traders can book profit when underlying asset stays within a tight trading range.