PROTECTIVE PUT	REVERSE IRON BUTTERFLY
About Strategy	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..	Reverse Iron Butterfly Option Strategy Reverse Iron Butterfly as the name suggests is the opposite of Iron Butterfly. In Reverse Iron Butterfly, a trader is bullish on volatility and expects the market to make significant move in the near future in either directions. Here a trader will buy 1 ATM Call Option, sell 1 OTM Call Option, buy 1 ATM Put Option, sell 1 OTM Put Option. This strategy also bags lim .. Read more..

PROTECTIVE PUT Vs REVERSE IRON BUTTERFLY - Details

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

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

	PROTECTIVE PUT	REVERSE IRON BUTTERFLY
Market View	Bullish	Neutral
When to use?	This strategy is adopted when a trader is long on the underlying asset but skeptical of the downside.	This strategy is used when a trader is bullish on volatility and expects the market to make significant move in the near future in either directions.
Action	Buy 1 ATM Put	Sell 1 OTM Put, Buy 1 ATM Put, Buy 1 ATM Call, Sell 1 OTM Call
Breakeven Point	Purchase Price of Underlying + Premium Paid	Upper Breakeven Point = Strike Price of Long Call + Net Premium Paid, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid

PROTECTIVE PUT Vs REVERSE IRON BUTTERFLY - Risk & Reward

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

PROTECTIVE PUT Vs REVERSE IRON BUTTERFLY - Strategy Pros & Cons

	PROTECTIVE PUT	REVERSE IRON BUTTERFLY
Similar Strategies	Long Call, Call Backspread	Short Put Butterfly, Short Condor
Disadvantage	• 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.	• Potential loss is higher than gain, complex strategy. • Not suitable for beginners.
Advantages	• 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.	• Able to profit whether stocks move in either direction up or down. • This strategy can be used by option traders who cannot use credit spreads. • Predictable maximum loss and profits, volatile strategy.