SHORT CALL BUTTERFLY	RISK REVERSAL
About Strategy	Short Call Butterfly Option Strategy This strategy is opposite of the Long Call Butterfly Strategy, a trader expects the market to remain range bound in Long Call Butterfly, but here he expects the market to move beyond strike boundaries in Short Call Butterfly. If the trader is bullish on the market’s volatility, he will implement this strategy. Here also there should be equal distance between the 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..

SHORT CALL BUTTERFLY Vs RISK REVERSAL - Details

	SHORT CALL BUTTERFLY	RISK REVERSAL
Market View	Neutral	Bullish
Type (CE/PE)	CE (Call Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	4	2
Strategy Level	Advance	Advance
Reward Profile	Limited	Unlimited
Risk Profile	Limited	Unlimited
Breakeven Point	Lower Break-even = Lower Strike Price + Net Premium, Upper Break-even = Higher Strike Price - Net Premium	Premium received - Put Strike Price

SHORT CALL BUTTERFLY Vs RISK REVERSAL - When & How to use ?

	SHORT CALL BUTTERFLY	RISK REVERSAL
Market View	Neutral	Bullish
When to use?	This strategy is meant for special scenarios where you foresee a lot of volatility in the market due to election results, budget, policy change, annual result announcements etc.	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 2 ATM Call, Sell 1 ITM Call, Sell 1 OTM Call	This strategy work when an investor want to hedge their position by buying a put option and selling a call option.
Breakeven Point	Lower Break-even = Lower Strike Price + Net Premium, Upper Break-even = Higher Strike Price - Net Premium	Premium received - Put Strike Price

SHORT CALL BUTTERFLY Vs RISK REVERSAL - Risk & Reward

	SHORT CALL BUTTERFLY	RISK REVERSAL
Maximum Profit Scenario	The profit is limited to the net premium received.	You have unlimited profit potential to the upside.
Maximum Loss Scenario	Higher strike price- Lower Strike Price - Net Premium	You have nearly unlimited downside risk as well because you are short the put
Risk	Limited	Unlimited
Reward	Limited	Unlimited

SHORT CALL BUTTERFLY Vs RISK REVERSAL - Strategy Pros & Cons

	SHORT CALL BUTTERFLY	RISK REVERSAL
Similar Strategies	Long Straddle, Long Call Butterfly	-
Disadvantage	• Limited rewards, usually offer smaller return. • Profitability depends on the significant movement of stocks and options prices.	Unlimited Risk.
Advantages	• Even if the market is highly volatile, the risk exposure remains limited. • Without any extra investment, you can receive your premium. • Able to book profits even when the price movement cannot be predicted.	Unlimited profit.