COVERED PUT	REVERSE IRON BUTTERFLY
About Strategy	Covered Put Option Strategy  This strategy is exactly opposite to Covered Call Strategy. Here the investor is neutral or moderately bearish in nature and wants to take advantage of the price fall in the near future. The trader will short one lot of stock future. Now the trader will short ATM Put Option, the option strike price will be his exit price. If the prices rally above the strike price, the 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..

COVERED PUT Vs REVERSE IRON BUTTERFLY - Details

	COVERED PUT	REVERSE IRON BUTTERFLY
Market View	Bearish	Neutral
Type (CE/PE)	PE (Put Option) + Underlying	CE (Call Option) + PE (Put Option)
Number Of Positions	2	4
Strategy Level	Advance	Advance
Reward Profile	Limited	Limited
Risk Profile	Unlimited	Limited
Breakeven Point	Futures Price + Premium Received	Upper Breakeven Point = Strike Price of Long Call + Net Premium Paid, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid

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

	COVERED PUT	REVERSE IRON BUTTERFLY
Market View	Bearish	Neutral
When to use?	The Covered Put works well when the market is moderately Bearish.	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	Sell Underlying Sell OTM Put Option	Sell 1 OTM Put, Buy 1 ATM Put, Buy 1 ATM Call, Sell 1 OTM Call
Breakeven Point	Futures Price + Premium Received	Upper Breakeven Point = Strike Price of Long Call + Net Premium Paid, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid

COVERED PUT Vs REVERSE IRON BUTTERFLY - Risk & Reward

	COVERED PUT	REVERSE IRON BUTTERFLY
Maximum Profit Scenario	The profit happens when the price of the underlying moves above strike price of Short Put.	Strike Price of Short Call (or Long Put) - Strike Price of Long Call (or Short Put) - Net Premium Paid - Commissions Paid
Maximum Loss Scenario	Price of Underlying - Sale Price of Underlying - Premium Received	Net Premium Paid + Commissions Paid
Risk	Unlimited	Limited
Reward	Limited	Limited

COVERED PUT Vs REVERSE IRON BUTTERFLY - Strategy Pros & Cons

	COVERED PUT	REVERSE IRON BUTTERFLY
Similar Strategies	Bear Put Spread, Bear Call Spread	Short Put Butterfly, Short Condor
Disadvantage	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.	• Potential loss is higher than gain, complex strategy. • Not suitable for beginners.
Advantages	• Investors can book profit when underlying stock price drop, move sideways or rises by a small amount. • Able to generate monthly income. • Able to generate profit from fall in prices or mild increase in the prices.	• 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.