SHORT CALL BUTTERFLY	PROTECTIVE PUT
About Strategy	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..	Protective Put Option Strategy Protective Put Strategy is a hedging strategy where trader guards himself from the downside risk. This strategy is adopted when a trader is long on the underlying asset but skeptical of the downside. He will buy one ATM Put Option to hedge his position. Now, if the underlying asset moves either up or down, the trader is in a safe position. Read more..

SHORT CALL BUTTERFLY Vs PROTECTIVE PUT - Details

	SHORT CALL BUTTERFLY	PROTECTIVE PUT
Market View	Neutral	Bullish
Type (CE/PE)	CE (Call Option)	PE (Put Option)
Number Of Positions	4	1
Strategy Level	Advance	Beginners
Reward Profile	Limited	Unlimited
Risk Profile	Limited	Limited
Breakeven Point	Lower Break-even = Lower Strike Price + Net Premium, Upper Break-even = Higher Strike Price - Net Premium	Purchase Price of Underlying + Premium Paid

SHORT CALL BUTTERFLY Vs PROTECTIVE PUT - When & How to use ?

	SHORT CALL BUTTERFLY	PROTECTIVE PUT
Market View	Neutral	Bullish
When to use?	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.	This strategy is adopted when a trader is long on the underlying asset but skeptical of the downside.
Action	Buy 2 ATM Call, Sell 1 ITM Call, Sell 1 OTM Call	Buy 1 ATM Put
Breakeven Point	Lower Break-even = Lower Strike Price + Net Premium, Upper Break-even = Higher Strike Price - Net Premium	Purchase Price of Underlying + Premium Paid

SHORT CALL BUTTERFLY Vs PROTECTIVE PUT - Risk & Reward

	SHORT CALL BUTTERFLY	PROTECTIVE PUT
Maximum Profit Scenario	The profit is limited to the net premium received.	Price of Underlying - Purchase Price of Underlying - Premium Paid
Maximum Loss Scenario	Higher strike price- Lower Strike Price - Net Premium	Premium Paid + Purchase Price of Underlying - Put Strike + Commissions Paid
Risk	Limited	Limited
Reward	Limited	Unlimited

SHORT CALL BUTTERFLY Vs PROTECTIVE PUT - Strategy Pros & Cons

	SHORT CALL BUTTERFLY	PROTECTIVE PUT
Similar Strategies	Long Straddle, Long Call Butterfly	Long Call, Call Backspread
Disadvantage	• Limited rewards, usually offer smaller return. • Profitability depends on the significant movement of stocks and options prices.	• Value of protective put position decreases as time passes • Holding period of the protective put can be affected by the timing as a result tax rate on the profit or loss from the stock can be affected.
Advantages	• 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.	• Unlimited potential profit due to indefinitely rise in the underlying stock price . • This strategy allows you to hold on to your stocks while insuring against losses. • Hedging strategy, trader can guard himself from the downside risk.