SHORT STRANGLE	IRON BUTTERFLY
About Strategy	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 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 Vs IRON BUTTERFLY - Details

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

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

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

SHORT STRANGLE Vs IRON BUTTERFLY - Risk & Reward

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

SHORT STRANGLE Vs IRON BUTTERFLY - Strategy Pros & Cons

	SHORT STRANGLE	IRON BUTTERFLY
Similar Strategies	Short Straddle, Long Strangle	Long Put Butterfly, Neutral Calendar Spread
Disadvantage	• Unlimited loss is associated with this strategy, not recommended for beginners. • Limited reward amount.	• Large commissions involved. • Probability of losses are higher.
Advantages	• 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.	• 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.