IRON BUTTERFLY	SHORT STRANGLE
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..	Short Strangle Option Strategy  This strategy is similar to Short Straddle; the only difference is of the strike prices at which the positions are built. Short Strangle involves selling of one OTM Call Option and selling of one OTM Put Option, of the same expiry date and same underlying asset. Here the probability of making profits is more as there is a spread between the two strike prices, and if .. Read more..

IRON BUTTERFLY Vs SHORT STRANGLE - Details

	IRON BUTTERFLY	SHORT STRANGLE
Market View	Neutral	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option) + PE (Put 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 Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received	Lower Break-even = Strike Price of Put - Net Premium, Upper Break-even = Strike Price of Call+ Net Premium

IRON BUTTERFLY Vs SHORT STRANGLE - When & How to use ?

	IRON BUTTERFLY	SHORT STRANGLE
Market View	Neutral	Neutral
When to use?	This strategy is implemented when a trader is bearish on the volatility of market and neutral on the market movements.	This strategy is perfect in a neutral market scenario when the underlying is expected to be less volatile.
Action	Buy 1 OTM Put, Sell 1 ATM Put, Sell 1 ATM Call, Buy 1 OTM Call	Sell OTM Call, Sell OTM Put
Breakeven Point	Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received	Lower Break-even = Strike Price of Put - Net Premium, Upper Break-even = Strike Price of Call+ Net Premium

IRON BUTTERFLY Vs SHORT STRANGLE - Risk & Reward

	IRON BUTTERFLY	SHORT STRANGLE
Maximum Profit Scenario	Net Premium Received - Commissions Paid	Maximum Profit = Net Premium Received
Maximum Loss Scenario	Strike Price of Long Call - Strike Price of Short Call - Net Premium Received + Commissions Paid	Loss = Price of Underlying - Strike Price of Short Call - Net Premium Received
Risk	Limited	Unlimited
Reward	Limited	Limited

IRON BUTTERFLY Vs SHORT STRANGLE - Strategy Pros & Cons

	IRON BUTTERFLY	SHORT STRANGLE
Similar Strategies	Long Put Butterfly, Neutral Calendar Spread	Short Straddle, Long Strangle
Disadvantage	• Large commissions involved. • Probability of losses are higher.	• Unlimited loss is associated with this strategy, not recommended for beginners. • Limited reward amount.
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.	• Higher chance of profitability due to selling of OTM options. • Advantage from double time decay and a contraction in volatility. • Traders can book profit when underlying asset stays within a tight trading range.