SHORT CALL	IRON BUTTERFLY
About Strategy	Short Call Option Strategy A trader shorts or writes a Call Option when he feels that underlying stock price is likely to go down. Selling Call Option is a strategy preferred for experienced traders. However this strategy is very risky in nature. If the stock rallies on the upside, your risk becomes potentially unquantifiable and unlimited. If the strategy Read more..	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 CALL Vs IRON BUTTERFLY - Details

	SHORT CALL	IRON BUTTERFLY
Market View	Bearish	Neutral
Type (CE/PE)	CE (Call Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	1	4
Strategy Level	Advance	Advance
Reward Profile	Limited	Limited
Risk Profile	Unlimited	Limited
Breakeven Point	Strike Price of Short Call + Premium Received	Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received

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

	SHORT CALL	IRON BUTTERFLY
Market View	Bearish	Neutral
When to use?	It is an aggressive strategy and involves huge risks. It should be used only in case where trader is certain about the bearish market view on the underlying.	This strategy is implemented when a trader is bearish on the volatility of market and neutral on the market movements.
Action	Sell or Write Call Option	Buy 1 OTM Put, Sell 1 ATM Put, Sell 1 ATM Call, Buy 1 OTM Call
Breakeven Point	Strike Price of Short Call + Premium Received	Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received

SHORT CALL Vs IRON BUTTERFLY - Risk & Reward

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

SHORT CALL Vs IRON BUTTERFLY - Strategy Pros & Cons

	SHORT CALL	IRON BUTTERFLY
Similar Strategies	Covered Put, Covered Calls	Long Put Butterfly, Neutral Calendar Spread
Disadvantage	• Unlimited risk to the upside underlying stocks. • Potential loss more than the premium collected.	• Large commissions involved. • Probability of losses are higher.
Advantages	• With the help of this strategy, traders can book profit from falling prices in the underlying asset. • Less investment, more profit. • Traders can book profit when underlying stock price fall, move sideways or rise by a small amount.	• 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.