SHORT PUT	SHORT 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..	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..

SHORT PUT Vs SHORT CALL BUTTERFLY - Details

	SHORT PUT	SHORT 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	Lower Break-even = Lower Strike Price + Net Premium, Upper Break-even = Higher Strike Price - Net Premium

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

	SHORT PUT	SHORT 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 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.
Action	Sell Put Option	Buy 2 ATM Call, Sell 1 ITM Call, Sell 1 OTM Call
Breakeven Point	Strike Price - Premium	Lower Break-even = Lower Strike Price + Net Premium, Upper Break-even = Higher Strike Price - Net Premium

SHORT PUT Vs SHORT CALL BUTTERFLY - Risk & Reward

	SHORT PUT	SHORT CALL BUTTERFLY
Maximum Profit Scenario	Premium received in your account when you sell the Put Option.	The profit is limited to the net premium received.
Maximum Loss Scenario	Unlimited (When the price of the underlying falls.)	Higher strike price- Lower Strike Price - Net Premium
Risk	Unlimited	Limited
Reward	Limited	Limited

SHORT PUT Vs SHORT CALL BUTTERFLY - Strategy Pros & Cons

	SHORT PUT	SHORT CALL BUTTERFLY
Similar Strategies	Bull Put Spread, Short Starddle	Long Straddle, Long Call Butterfly
Disadvantage	• Unlimited risk. • Huge losses if the price of the underlying stock falls steeply.	• Limited rewards, usually offer smaller return. • Profitability depends on the significant movement of stocks and options prices.
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.	• 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.