LONG COMBO	IRON BUTTERFLY
About Strategy	Long Combo Option Strategy  Long Combo Option Trading Strategy is implemented when a trader is bullish in nature and expects the stock price to rise in the near future. Here a trader will sell one ‘Out of the Money’ Put Option and buy one ‘Out of the Money’ Call Option. This trade will require less capital to implement since the amount required to buy the call will be covered by the amount received Read more..	Iron Butterfly Option Strategy  This strategy is implemented when a trader is bearish on the volatility of market and neutral on the market movements. A trader will buy 1 OTM Put Option, sell 1 ATM Put Option, sell 1 ATM Call Option, buy 1 OTM Call Option. Due to offsetting of long and short positions, this strategy bags limited profit with limited risk. Read more..

LONG COMBO Vs IRON BUTTERFLY - Details

	LONG COMBO	IRON BUTTERFLY
Market View	Bullish	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	2	4
Strategy Level	Advance	Advance
Reward Profile	Unlimited	Limited
Risk Profile	Unlimited	Limited
Breakeven Point	Call Strike + Net Premium	Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received

LONG COMBO Vs IRON BUTTERFLY - When & How to use ?

	LONG COMBO	IRON BUTTERFLY
Market View	Bullish	Neutral
When to use?	This strategy is used when an investor Bullish on an underlying but don't have the required capital or the risk appetite to invest directly into it.	This strategy is implemented when a trader is bearish on the volatility of market and neutral on the market movements.
Action	Sell OTM Put Option, Buy OTM Call Option	Buy 1 OTM Put, Sell 1 ATM Put, Sell 1 ATM Call, Buy 1 OTM Call
Breakeven Point	Call Strike + Net Premium	Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received

LONG COMBO Vs IRON BUTTERFLY - Risk & Reward

	LONG COMBO	IRON BUTTERFLY
Maximum Profit Scenario	Underlying asset goes up and Call option exercised	Net Premium Received - Commissions Paid
Maximum Loss Scenario	Underlying asset goes down and Put option exercised	Strike Price of Long Call - Strike Price of Short Call - Net Premium Received + Commissions Paid
Risk	Unlimited	Limited
Reward	Unlimited	Limited

LONG COMBO Vs IRON BUTTERFLY - Strategy Pros & Cons

	LONG COMBO	IRON BUTTERFLY
Similar Strategies	-	Long Put Butterfly, Neutral Calendar Spread
Disadvantage	• Losses can keep on increasing as the price of stock goes down. • High risk strategy.	• Large commissions involved. • Probability of losses are higher.
Advantages	• Capital investment is low and returns are high. • Unlimited reward, returns keep on increasing with the increase on stock price. • Leverage facility provided by this strategy is very beneficial.	• Less amount of capital investment, steady income with low risk. • Traders can predict maximum loss and profit. • Versatile strategy, investors can transform position into bear call spread or bull put spread easily.