LONG PUT BUTTERFLY	RISK REVERSAL
About Strategy	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 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 Vs RISK REVERSAL - Details

	LONG PUT BUTTERFLY	RISK REVERSAL
Market View	Neutral	Bullish
Type (CE/PE)	PE (Put Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	4	2
Strategy Level	Advance	Advance
Reward Profile	Limited	Unlimited
Risk Profile	Limited	Unlimited
Breakeven Point	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	Premium received - Put Strike Price

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

	LONG PUT BUTTERFLY	RISK REVERSAL
Market View	Neutral	Bullish
When to use?	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 can be used for hedging. When an investor want to protect long or short position by using a call and put option.
Action	Buy 1 OTM Put, Sell 2 ATM Puts, Buy 1 ITM Put	This strategy work when an investor want to hedge their position by buying a put option and selling a call option.
Breakeven Point	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	Premium received - Put Strike Price

LONG PUT BUTTERFLY Vs RISK REVERSAL - Risk & Reward

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

LONG PUT BUTTERFLY Vs RISK REVERSAL - Strategy Pros & Cons

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