RATIO PUT SPREAD	IRON BUTTERFLY
About Strategy	Ratio Put Spread Option Strategy  This strategy involves buying ITM Puts and simultaneously selling OTM Puts, double the number of ITM Puts. This strategy is used by a trader who is neutral on the market and bearish on the volatility in the near future. Here profits will be capped up to the premium amount and risk will be potentially unlimited. 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..

RATIO PUT SPREAD Vs IRON BUTTERFLY - Details

	RATIO PUT SPREAD	IRON BUTTERFLY
Market View	Neutral	Neutral
Type (CE/PE)	PE (Put Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	3	4
Strategy Level	Beginners	Advance
Reward Profile	Limited	Limited
Risk Profile	Unlimited	Limited
Breakeven Point	Upper Breakeven Point = Strike Price of Long Put +/- Net Premium Received or Paid, Lower Breakeven Point = Strike Price of Short Puts - (Points of Maximum Profit / Number of Uncovered Puts)	Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received

RATIO PUT SPREAD Vs IRON BUTTERFLY - When & How to use ?

	RATIO PUT SPREAD	IRON BUTTERFLY
Market View	Neutral	Neutral
When to use?	This strategy is used by a trader who is neutral on the market and bearish on the volatility in the near future.	This strategy is implemented when a trader is bearish on the volatility of market and neutral on the market movements.
Action	Buy 1 ITM Put, Sell 2 OTM Puts	Buy 1 OTM Put, Sell 1 ATM Put, Sell 1 ATM Call, Buy 1 OTM Call
Breakeven Point	Upper Breakeven Point = Strike Price of Long Put +/- Net Premium Received or Paid, Lower Breakeven Point = Strike Price of Short Puts - (Points of Maximum Profit / Number of Uncovered Puts)	Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received

RATIO PUT SPREAD Vs IRON BUTTERFLY - Risk & Reward

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

RATIO PUT SPREAD Vs IRON BUTTERFLY - Strategy Pros & Cons

	RATIO PUT SPREAD	IRON BUTTERFLY
Similar Strategies	Short Straddle (Sell Straddle), Short Strangle (Sell Strangle)	Long Put Butterfly, Neutral Calendar Spread
Disadvantage	• Unlimited potential risk. • Limited profit.	• Large commissions involved. • Probability of losses are higher.
Advantages	• Directional strategy so that there is either no upside or downside risk. • Able to profit even if trader is neutral on the market. • Higher probability of profit.	• 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.