RISK REVERSAL	LONG PUT BUTTERFLY
About Strategy	Risk Reversal Option Strategy This strategy protects an investor from unfavourable price movements in the position but limits the profits can be made on that position. A risk reversal is a hedging strategy that protects a long or short position by using put and call options. In this one option is buying and other is written. In this strategy the trader has to pay a premium, while the written option prod Read more..	Long Put Butterfly Option Strategy  The Long Put Butterfly is a neutral strategy where a trader will be bearish on the volatility i.e. he thinks the market will have sideways kind of movement and will not rally sharply in either direction in the near future. This strategy involves sale of 2 ATM Put Options, buy 1 ITM and 1 OTM Put Option. The risk and reward are limited. Read more..

RISK REVERSAL Vs LONG PUT BUTTERFLY - Details

	RISK REVERSAL	LONG PUT BUTTERFLY
Market View	Bullish	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option)	PE (Put Option)
Number Of Positions	2	4
Strategy Level	Advance	Advance
Reward Profile	Unlimited	Limited
Risk Profile	Unlimited	Limited
Breakeven Point	Premium received - Put Strike Price	Upper Breakeven Point = Strike Price of Highest Strike Long Put - Net Premium Paid, Lower Breakeven Point = Strike Price of Lowest Strike Long Put + Net Premium Paid

RISK REVERSAL Vs LONG PUT BUTTERFLY - When & How to use ?

	RISK REVERSAL	LONG PUT BUTTERFLY
Market View	Bullish	Neutral
When to use?	This strategy can be used for hedging. When an investor want to protect long or short position by using a call and put option.	The Long Put Butterfly is a neutral strategy where a trader will be bearish on the volatility i.e. he thinks the market will have sideways kind of movement and will not rally sharply in either direction in the near future.
Action	This strategy work when an investor want to hedge their position by buying a put option and selling a call option.	Buy 1 OTM Put, Sell 2 ATM Puts, Buy 1 ITM Put
Breakeven Point	Premium received - Put Strike Price	Upper Breakeven Point = Strike Price of Highest Strike Long Put - Net Premium Paid, Lower Breakeven Point = Strike Price of Lowest Strike Long Put + Net Premium Paid

RISK REVERSAL Vs LONG PUT BUTTERFLY - Risk & Reward

	RISK REVERSAL	LONG PUT BUTTERFLY
Maximum Profit Scenario	You have unlimited profit potential to the upside.	Strike Price of Higher Strike Long Put - Strike Price of Short Put - Net Premium Paid - Commissions Paid
Maximum Loss Scenario	You have nearly unlimited downside risk as well because you are short the put	When Price of Underlying <= Strike Price of Lower Strike Long Put OR Price of Underlying >= Strike Price of Higher Strike Long Put
Risk	Unlimited	Limited
Reward	Unlimited	Limited

RISK REVERSAL Vs LONG PUT BUTTERFLY - Strategy Pros & Cons

	RISK REVERSAL	LONG PUT BUTTERFLY
Similar Strategies	-	Iron Condors, Iron Butterfly
Disadvantage	Unlimited Risk.	• Risk is higher than reward. • When the underlying price is in between the two breakeven points, time decay hurts the position.
Advantages	Unlimited profit.	• Limited maximum loss. • Unlimited profit potential, risk only limited to loss of premium. • Benefits from low volatility.