IRON BUTTERFLY	PROTECTIVE PUT
About Strategy	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..	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..

IRON BUTTERFLY Vs PROTECTIVE PUT - Details

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

IRON BUTTERFLY Vs PROTECTIVE PUT - When & How to use ?

	IRON BUTTERFLY	PROTECTIVE PUT
Market View	Neutral	Bullish
When to use?	This strategy is implemented when a trader is bearish on the volatility of market and neutral on the market movements.	This strategy is adopted when a trader is long on the underlying asset but skeptical of the downside.
Action	Buy 1 OTM Put, Sell 1 ATM Put, Sell 1 ATM Call, Buy 1 OTM Call	Buy 1 ATM Put
Breakeven Point	Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received	Purchase Price of Underlying + Premium Paid

IRON BUTTERFLY Vs PROTECTIVE PUT - Risk & Reward

	IRON BUTTERFLY	PROTECTIVE PUT
Maximum Profit Scenario	Net Premium Received - Commissions Paid	Price of Underlying - Purchase Price of Underlying - Premium Paid
Maximum Loss Scenario	Strike Price of Long Call - Strike Price of Short Call - Net Premium Received + Commissions Paid	Premium Paid + Purchase Price of Underlying - Put Strike + Commissions Paid
Risk	Limited	Limited
Reward	Limited	Unlimited

IRON BUTTERFLY Vs PROTECTIVE PUT - Strategy Pros & Cons

	IRON BUTTERFLY	PROTECTIVE PUT
Similar Strategies	Long Put Butterfly, Neutral Calendar Spread	Long Call, Call Backspread
Disadvantage	• Large commissions involved. • Probability of losses are higher.	• 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	• 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.	• 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.