RATIO CALL SPREAD	SHORT CALL BUTTERFLY
About Strategy	Ratio Call Spread Option Strategy  As the name suggests, a ratio of 2:1 is followed i.e. buy 1 ITM Call and simultaneously sell OTM Calls double the number of ITM Calls (In this case 2). This strategy is used by 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 since he is Read more..	Short Call Butterfly Option Strategy This strategy is opposite of the Long Call Butterfly Strategy, a trader expects the market to remain range bound in Long Call Butterfly, but here he expects the market to move beyond strike boundaries in Short Call Butterfly. If the trader is bullish on the market’s volatility, he will implement this strategy. Here also there should be equal distance between the .. Read more..

RATIO CALL SPREAD Vs SHORT CALL BUTTERFLY - Details

	RATIO CALL SPREAD	SHORT CALL BUTTERFLY
Market View	Neutral	Neutral
Type (CE/PE)	CE (Call Option)	CE (Call 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 Short Calls + (Points of Maximum Profit / Number of Uncovered Calls), Lower Breakeven Point = Strike Price of Long Call +/- Net Premium Paid or Received	Lower Break-even = Lower Strike Price + Net Premium, Upper Break-even = Higher Strike Price - Net Premium

RATIO CALL SPREAD Vs SHORT CALL BUTTERFLY - When & How to use ?

	RATIO CALL SPREAD	SHORT CALL BUTTERFLY
Market View	Neutral	Neutral
When to use?	This strategy is used by 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 since he is selling two calls.	This strategy is meant for special scenarios where you foresee a lot of volatility in the market due to election results, budget, policy change, annual result announcements etc.
Action	Buy 1 ITM Call, Sell 2 OTM Calls	Buy 2 ATM Call, Sell 1 ITM Call, Sell 1 OTM Call
Breakeven Point	Upper Breakeven Point = Strike Price of Short Calls + (Points of Maximum Profit / Number of Uncovered Calls), Lower Breakeven Point = Strike Price of Long Call +/- Net Premium Paid or Received	Lower Break-even = Lower Strike Price + Net Premium, Upper Break-even = Higher Strike Price - Net Premium

RATIO CALL SPREAD Vs SHORT CALL BUTTERFLY - Risk & Reward

	RATIO CALL SPREAD	SHORT CALL BUTTERFLY
Maximum Profit Scenario	Strike Price of Short Call - Strike Price of Long Call + Net Premium Received - Commissions Paid	The profit is limited to the net premium received.
Maximum Loss Scenario	Price of Underlying - Strike Price of Short Calls - Max Profit + Commissions Paid	Higher strike price- Lower Strike Price - Net Premium
Risk	Unlimited	Limited
Reward	Limited	Limited

RATIO CALL SPREAD Vs SHORT CALL BUTTERFLY - Strategy Pros & Cons

	RATIO CALL SPREAD	SHORT CALL BUTTERFLY
Similar Strategies	Variable Ratio Write	Long Straddle, Long Call Butterfly
Disadvantage	• Unlimited potential loss. • Complex strategy with limited profit.	• Limited rewards, usually offer smaller return. • Profitability depends on the significant movement of stocks and options prices.
Advantages	• Downside risk is almost zero. • Investors can book profit from share prices moving within given limits. • Trader can maximise profit when the share closes at the upper breakeven point.	• Even if the market is highly volatile, the risk exposure remains limited. • Without any extra investment, you can receive your premium. • Able to book profits even when the price movement cannot be predicted.