THE COLLAR	REVERSE IRON BUTTERFLY
About Strategy	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..	Reverse Iron Butterfly Option Strategy Reverse Iron Butterfly as the name suggests is the opposite of Iron Butterfly. In Reverse Iron Butterfly, a trader is bullish on volatility and expects the market to make significant move in the near future in either directions. Here a trader will buy 1 ATM Call Option, sell 1 OTM Call Option, buy 1 ATM Put Option, sell 1 OTM Put Option. This strategy also bags lim .. Read more..

THE COLLAR Vs REVERSE IRON BUTTERFLY - Details

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

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

	THE COLLAR	REVERSE IRON BUTTERFLY
Market View	Bullish	Neutral
When to use?	It should be used only in case where trader is certain about the bearish market view.	This strategy is used when a trader is bullish on volatility and expects the market to make significant move in the near future in either directions.
Action	Buy Underlying, Buy 1 ATM Put Option, Sell 1 OTM Call Option	Sell 1 OTM Put, Buy 1 ATM Put, Buy 1 ATM Call, Sell 1 OTM Call
Breakeven Point	Price of Features - Call Premium + Put Premium	Upper Breakeven Point = Strike Price of Long Call + Net Premium Paid, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid

THE COLLAR Vs REVERSE IRON BUTTERFLY - Risk & Reward

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

THE COLLAR Vs REVERSE IRON BUTTERFLY - Strategy Pros & Cons

	THE COLLAR	REVERSE IRON BUTTERFLY
Similar Strategies	Call Spread, Bull Put Spread	Short Put Butterfly, Short Condor
Disadvantage	• Limited profit. • A trader can book more profit without this strategy if the prices goes high.	• Potential loss is higher than gain, complex strategy. • Not suitable for beginners.
Advantages	• 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.	• Able to profit whether stocks move in either direction up or down. • This strategy can be used by option traders who cannot use credit spreads. • Predictable maximum loss and profits, volatile strategy.