SHORT PUT	LONG CALL BUTTERFLY
About Strategy	Short Put Option Strategy A trader will short put if he is bullish in nature and expects the underlying asset not to fall below a certain level. Risk: Losses will be potentially unlimited if the stock skyrockets above the strike price of put. Read more..	Long Call Butterfly Option Strategy A trader, who is neutral in nature and believes that there will be very low volatility i.e. expects the market to remain range bound, will implement this strategy. This strategy involves selling of 2 ATM Call Options, buying 1 ITM Call Option & buying 1 OTM Call Option of the same expiry date & same underlying asset. The difference between the strikes sho .. Read more..

SHORT PUT Vs LONG CALL BUTTERFLY - Details

	SHORT PUT	LONG CALL BUTTERFLY
Market View	Bullish	Neutral
Type (CE/PE)	PE (Put Option)	CE (Call Option)
Number Of Positions	1	4
Strategy Level	Beginners	Advance
Reward Profile	Limited	Limited
Risk Profile	Unlimited	Limited
Breakeven Point	Strike Price - Premium	Upper Breakeven = Higher Strike Price - Net Premium, Lower Breakeven = Lower Strike Price + Net Premium

SHORT PUT Vs LONG CALL BUTTERFLY - When & How to use ?

	SHORT PUT	LONG CALL BUTTERFLY
Market View	Bullish	Neutral
When to use?	This strategy works well when you're Bullish that the price of the underlying will not fall beyond a certain level.	This strategy should be used when you're expecting no volatility in the price of the underlying.
Action	Sell Put Option	Sell 2 ATM Call, Buy 1 ITM Call, Buy 1 OTM Call
Breakeven Point	Strike Price - Premium	Upper Breakeven = Higher Strike Price - Net Premium, Lower Breakeven = Lower Strike Price + Net Premium

SHORT PUT Vs LONG CALL BUTTERFLY - Risk & Reward

	SHORT PUT	LONG CALL BUTTERFLY
Maximum Profit Scenario	Premium received in your account when you sell the Put Option.	Adjacent strikes - Net premium debit.
Maximum Loss Scenario	Unlimited (When the price of the underlying falls.)	Net Premium Paid
Risk	Unlimited	Limited
Reward	Limited	Limited

SHORT PUT Vs LONG CALL BUTTERFLY - Strategy Pros & Cons

	SHORT PUT	LONG CALL BUTTERFLY
Similar Strategies	Bull Put Spread, Short Starddle	-
Disadvantage	• Unlimited risk. • Huge losses if the price of the underlying stock falls steeply.	• Due to limited lifespan of call options, you can lose the premium paid. • Limited profit which is bound in a narrow range between the two wing strikes.
Advantages	• Benefit from time decay. • Less capital required than buying the stock outright. • Profit when underlying stock price rise, move sideways or drop by a relatively small account.	• Under this strategy, a trader can book profit even when there is not volatility in the market. • Limited risks to the net premium paid. • This strategy allows you to gain more profits by investing less and limiting your losses to minimum.