SHORT PUT BUTTERFLY	COVERED CALL
About Strategy	Short Put Butterfly Option Strategy  In Short Put Butterfly strategy, a trader is neutral in nature and expects the market to remain range bound in the near future. A trader will buy 2 ATM Put Options; sell 1 ITM & 1 OTM Put Options. Here risk and returns both are limited. Risk:< Read more..	Covered Call Option Strategy Mr. X owns Reliance Shares and expects the price to rise in the near future. Mr. X is entitled to receive dividends for the shares he hold in cash market. Covered Call Strategy involves selling of OTM Call Option of the same underlying asset. The OTM Call Option Strike Price will generally be the price, where Mr. X will look to get out o .. Read more..

SHORT PUT BUTTERFLY Vs COVERED CALL - Details

	SHORT PUT BUTTERFLY	COVERED CALL
Market View	Neutral	Bullish
Type (CE/PE)	PE (Put Option)	CE (Call Option)
Number Of Positions	4	2
Strategy Level	Advance	Advance
Reward Profile	Limited	Limited
Risk Profile	Limited	Unlimited
Breakeven Point	Upper Breakeven Point = Strike Price of Highest Strike Short Put - Net Premium Received, Lower Breakeven Point = Strike Price of Lowest Strike Short Put + Net Premium Received	Purchase Price of Underlying- Premium Received

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

	SHORT PUT BUTTERFLY	COVERED CALL
Market View	Neutral	Bullish
When to use?	In Short Put Butterfly strategy, a trader is neutral in nature and expects the market to remain range bound in the near future.	An investor has a short term neutral view on the asset and for this reason holds the asset long and has a short position to generate income.
Action	Sell 1 ITM Put, Buy 2 ATM Put, Sell 1 OTM Put	(Buy Underlying) (Sell OTM Call Option)
Breakeven Point	Upper Breakeven Point = Strike Price of Highest Strike Short Put - Net Premium Received, Lower Breakeven Point = Strike Price of Lowest Strike Short Put + Net Premium Received	Purchase Price of Underlying- Premium Received

SHORT PUT BUTTERFLY Vs COVERED CALL - Risk & Reward

	SHORT PUT BUTTERFLY	COVERED CALL
Maximum Profit Scenario	Net Premium Received - Commissions Paid	[Call Strike Price - Stock Price Paid] + Premium Received
Maximum Loss Scenario	Strike Price of Higher Strike Short Put - Strike Price of Long Put - Net Premium Received + Commissions Paid	Purchase Price of Underlying - Price of Underlying) + Premium Received
Risk	Limited	Unlimited
Reward	Limited	Limited

SHORT PUT BUTTERFLY Vs COVERED CALL - Strategy Pros & Cons

	SHORT PUT BUTTERFLY	COVERED CALL
Similar Strategies	Short Condor, Reverse Iron Condor	Bull Call Spread
Disadvantage	• High risk strategy and may cause huge losses if the price of the underlying stocks falls steeply. • Higher profit is only possible when shares get close to expiration.	• Unlimited risk, limited reward. • Inability to earn interest on the proceed used to buy the underlying stock.
Advantages	• Benefits from time decay. • Traders can earn more in a rising or range bound scenario. • Benefits from a surge in volatility.	• Profit from option premium, rise in the underlying stock and dividends on the stock. • Allows you to generate income from your holding. • Profit when underlying stock price rise, move sideways or marginal fall.