IRON BUTTERFLY	THE COLLAR
About Strategy	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..	The Collar Option Strategy Collar Strategy is an extension to Covered Call Strategy. A trader, who is bullish in nature but has a very low risk appetite and wants to mitigate his risk will implement the Collar Strategy. Collar involves buying of stock in either Cash/Futures Market, buying an ATM Put Option & selling an OTM Call Option. The expiry dates of the op .. Read more..

IRON BUTTERFLY Vs THE COLLAR - Details

	IRON BUTTERFLY	THE COLLAR
Market View	Neutral	Bullish
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option) + PE (Put Option) + Underlying
Number Of Positions	4	3
Strategy Level	Advance	Advance
Reward Profile	Limited	Limited
Risk Profile	Limited	Limited
Breakeven Point	Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received	Price of Features - Call Premium + Put Premium

IRON BUTTERFLY Vs THE COLLAR - When & How to use ?

	IRON BUTTERFLY	THE COLLAR
Market View	Neutral	Bullish
When to use?	This strategy is implemented when a trader is bearish on the volatility of market and neutral on the market movements.	It should be used only in case where trader is certain about the bearish market view.
Action	Buy 1 OTM Put, Sell 1 ATM Put, Sell 1 ATM Call, Buy 1 OTM Call	Buy Underlying, Buy 1 ATM Put Option, Sell 1 OTM Call Option
Breakeven Point	Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received	Price of Features - Call Premium + Put Premium

IRON BUTTERFLY Vs THE COLLAR - Risk & Reward

	IRON BUTTERFLY	THE COLLAR
Maximum Profit Scenario	Net Premium Received - Commissions Paid	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received
Maximum Loss Scenario	Strike Price of Long Call - Strike Price of Short Call - Net Premium Received + Commissions Paid	Purchase Price of Underlying - Strike Price of Long Put - Net Premium Received
Risk	Limited	Limited
Reward	Limited	Limited

IRON BUTTERFLY Vs THE COLLAR - Strategy Pros & Cons

	IRON BUTTERFLY	THE COLLAR
Similar Strategies	Long Put Butterfly, Neutral Calendar Spread	Call Spread, Bull Put Spread
Disadvantage	• Large commissions involved. • Probability of losses are higher.	• Limited profit. • A trader can book more profit without this strategy if the prices goes high.
Advantages	• 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.	• This strategy protects the losses on underlying asset. • Risk gets limited if the price of the stocks goes down. • Trader can get ownership benefits life dividend and voting rights.