SHORT PUT BUTTERFLY	COVERED COMBINATION
About Strategy	Short Put Butterfly Option Strategy  In Short Put Butterfly strategy, a trader is neutral in nature and expects the market to remain range bound in the near future. A trader will buy 2 ATM Put Options; sell 1 ITM & 1 OTM Put Options. Here risk and returns both are limited. Risk:< Read more..	Covered Combination Option Strategy This strategy involves selling OTM Call & Put Options and buying the underlying asset in either cash or futures market. It is also known as Covered Strangle as the profits are capped and risk is potentially unlimited. Risk: Un .. Read more..

SHORT PUT BUTTERFLY Vs COVERED COMBINATION - Details

	SHORT PUT BUTTERFLY	COVERED COMBINATION
Market View	Neutral	Bullish
Type (CE/PE)	PE (Put Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	4	2
Strategy Level	Advance	Advance
Reward Profile	Limited	Limited
Risk Profile	Limited	Unlimited
Breakeven Point	Upper Breakeven Point = Strike Price of Highest Strike Short Put - Net Premium Received, Lower Breakeven Point = Strike Price of Lowest Strike Short Put + Net Premium Received	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

SHORT PUT BUTTERFLY Vs COVERED COMBINATION - When & How to use ?

	SHORT PUT BUTTERFLY	COVERED COMBINATION
Market View	Neutral	Bullish
When to use?	In Short Put Butterfly strategy, a trader is neutral in nature and expects the market to remain range bound in the near future.	This strategy is mainly suited for investors who are moderately bullish on a stock and are comfortable with increasing their position in the event of a price decline.
Action	Sell 1 ITM Put, Buy 2 ATM Put, Sell 1 OTM Put	Sell 1 OTM Call, Sell 1 OTM Put
Breakeven Point	Upper Breakeven Point = Strike Price of Highest Strike Short Put - Net Premium Received, Lower Breakeven Point = Strike Price of Lowest Strike Short Put + Net Premium Received	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

SHORT PUT BUTTERFLY Vs COVERED COMBINATION - Risk & Reward

	SHORT PUT BUTTERFLY	COVERED COMBINATION
Maximum Profit Scenario	Net Premium Received - Commissions Paid	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received - Commissions Paid
Maximum Loss Scenario	Strike Price of Higher Strike Short Put - Strike Price of Long Put - Net Premium Received + Commissions Paid	Purchase Price of Underlying + Strike Price of Short Put - (2 x Price of Underlying) - Max Profit + Commissions Paid
Risk	Limited	Unlimited
Reward	Limited	Limited

SHORT PUT BUTTERFLY Vs COVERED COMBINATION - Strategy Pros & Cons

	SHORT PUT BUTTERFLY	COVERED COMBINATION
Similar Strategies	Short Condor, Reverse Iron Condor	Stock Repair Strategy
Disadvantage	• High risk strategy and may cause huge losses if the price of the underlying stocks falls steeply. • Higher profit is only possible when shares get close to expiration.	Combinations can be profitable in sideways or rising markets. Greater combined net credit increases downside protection and potential return.
Advantages	• Benefits from time decay. • Traders can earn more in a rising or range bound scenario. • Benefits from a surge in volatility.	Limited Maximum Profit on the upside. Covered Combinations should only be traded on stocks that are bullish.