RATIO CALL SPREAD	IRON BUTTERFLY
About Strategy	Ratio Call Spread Option Strategy  As the name suggests, a ratio of 2:1 is followed i.e. buy 1 ITM Call and simultaneously sell OTM Calls double the number of ITM Calls (In this case 2). This strategy is used by trader who is neutral on the market and bearish on the volatility in the near future. Here profits will be capped up to the premium amount and risk will be potentially unlimited since he is 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..

RATIO CALL SPREAD Vs IRON BUTTERFLY - Details

	RATIO CALL SPREAD	IRON BUTTERFLY
Market View	Neutral	Neutral
Type (CE/PE)	CE (Call Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	3	4
Strategy Level	Beginners	Advance
Reward Profile	Limited	Limited
Risk Profile	Unlimited	Limited
Breakeven Point	Upper Breakeven Point = Strike Price of Short Calls + (Points of Maximum Profit / Number of Uncovered Calls), Lower Breakeven Point = Strike Price of Long Call +/- Net Premium Paid or Received	Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received

RATIO CALL SPREAD Vs IRON BUTTERFLY - When & How to use ?

	RATIO CALL SPREAD	IRON BUTTERFLY
Market View	Neutral	Neutral
When to use?	This strategy is used by trader who is neutral on the market and bearish on the volatility in the near future. Here profits will be capped up to the premium amount and risk will be potentially unlimited since he is selling two calls.	This strategy is implemented when a trader is bearish on the volatility of market and neutral on the market movements.
Action	Buy 1 ITM Call, Sell 2 OTM Calls	Buy 1 OTM Put, Sell 1 ATM Put, Sell 1 ATM Call, Buy 1 OTM Call
Breakeven Point	Upper Breakeven Point = Strike Price of Short Calls + (Points of Maximum Profit / Number of Uncovered Calls), Lower Breakeven Point = Strike Price of Long Call +/- Net Premium Paid or Received	Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received

RATIO CALL SPREAD Vs IRON BUTTERFLY - Risk & Reward

	RATIO CALL SPREAD	IRON BUTTERFLY
Maximum Profit Scenario	Strike Price of Short Call - Strike Price of Long Call + Net Premium Received - Commissions Paid	Net Premium Received - Commissions Paid
Maximum Loss Scenario	Price of Underlying - Strike Price of Short Calls - Max Profit + Commissions Paid	Strike Price of Long Call - Strike Price of Short Call - Net Premium Received + Commissions Paid
Risk	Unlimited	Limited
Reward	Limited	Limited

RATIO CALL SPREAD Vs IRON BUTTERFLY - Strategy Pros & Cons

	RATIO CALL SPREAD	IRON BUTTERFLY
Similar Strategies	Variable Ratio Write	Long Put Butterfly, Neutral Calendar Spread
Disadvantage	• Unlimited potential loss. • Complex strategy with limited profit.	• Large commissions involved. • Probability of losses are higher.
Advantages	• Downside risk is almost zero. • Investors can book profit from share prices moving within given limits. • Trader can maximise profit when the share closes at the upper breakeven point.	• 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.