LONG COMBO	SHORT CALL BUTTERFLY
About Strategy	Long Combo Option Strategy  Long Combo Option Trading Strategy is implemented when a trader is bullish in nature and expects the stock price to rise in the near future. Here a trader will sell one ‘Out of the Money’ Put Option and buy one ‘Out of the Money’ Call Option. This trade will require less capital to implement since the amount required to buy the call will be covered by the amount received Read more..	Short Call Butterfly Option Strategy This strategy is opposite of the Long Call Butterfly Strategy, a trader expects the market to remain range bound in Long Call Butterfly, but here he expects the market to move beyond strike boundaries in Short Call Butterfly. If the trader is bullish on the market’s volatility, he will implement this strategy. Here also there should be equal distance between the .. Read more..

LONG COMBO Vs SHORT CALL BUTTERFLY - Details

	LONG COMBO	SHORT CALL BUTTERFLY
Market View	Bullish	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option)
Number Of Positions	2	4
Strategy Level	Advance	Advance
Reward Profile	Unlimited	Limited
Risk Profile	Unlimited	Limited
Breakeven Point	Call Strike + Net Premium	Lower Break-even = Lower Strike Price + Net Premium, Upper Break-even = Higher Strike Price - Net Premium

LONG COMBO Vs SHORT CALL BUTTERFLY - When & How to use ?

	LONG COMBO	SHORT CALL BUTTERFLY
Market View	Bullish	Neutral
When to use?	This strategy is used when an investor Bullish on an underlying but don't have the required capital or the risk appetite to invest directly into it.	This strategy is meant for special scenarios where you foresee a lot of volatility in the market due to election results, budget, policy change, annual result announcements etc.
Action	Sell OTM Put Option, Buy OTM Call Option	Buy 2 ATM Call, Sell 1 ITM Call, Sell 1 OTM Call
Breakeven Point	Call Strike + Net Premium	Lower Break-even = Lower Strike Price + Net Premium, Upper Break-even = Higher Strike Price - Net Premium

LONG COMBO Vs SHORT CALL BUTTERFLY - Risk & Reward

	LONG COMBO	SHORT CALL BUTTERFLY
Maximum Profit Scenario	Underlying asset goes up and Call option exercised	The profit is limited to the net premium received.
Maximum Loss Scenario	Underlying asset goes down and Put option exercised	Higher strike price- Lower Strike Price - Net Premium
Risk	Unlimited	Limited
Reward	Unlimited	Limited

LONG COMBO Vs SHORT CALL BUTTERFLY - Strategy Pros & Cons

	LONG COMBO	SHORT CALL BUTTERFLY
Similar Strategies	-	Long Straddle, Long Call Butterfly
Disadvantage	• Losses can keep on increasing as the price of stock goes down. • High risk strategy.	• Limited rewards, usually offer smaller return. • Profitability depends on the significant movement of stocks and options prices.
Advantages	• Capital investment is low and returns are high. • Unlimited reward, returns keep on increasing with the increase on stock price. • Leverage facility provided by this strategy is very beneficial.	• Even if the market is highly volatile, the risk exposure remains limited. • Without any extra investment, you can receive your premium. • Able to book profits even when the price movement cannot be predicted.