SHORT STRADDLE	IRON BUTTERFLY
About Strategy	Short Straddle Option strategy This strategy is just the opposite of Long Straddle. A trader should adopt this strategy when he expects less volatility in the near future. Here, a trader will sell one Call Option & one Put Option of the same strike price, same expiry date and of the same underlying asset. If the stock/index hovers around the same levels then both the options will expire worthless an 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..

SHORT STRADDLE Vs IRON BUTTERFLY - Details

	SHORT STRADDLE	IRON BUTTERFLY
Market View	Neutral	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option)	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	Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call+ Net Premium	Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received

SHORT STRADDLE Vs IRON BUTTERFLY - When & How to use ?

	SHORT STRADDLE	IRON BUTTERFLY
Market View	Neutral	Neutral
When to use?	This strategy is work well when an investor expect a flat market in the coming days with very less movement in the prices of underlying asset.	This strategy is implemented when a trader is bearish on the volatility of market and neutral on the market movements.
Action	Sell Call Option, Sell Put Option	Buy 1 OTM Put, Sell 1 ATM Put, Sell 1 ATM Call, Buy 1 OTM Call
Breakeven Point	Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call+ Net Premium	Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received

SHORT STRADDLE Vs IRON BUTTERFLY - Risk & Reward

	SHORT STRADDLE	IRON BUTTERFLY
Maximum Profit Scenario	Max Profit = Net Premium Received - Commissions Paid	Net Premium Received - Commissions Paid
Maximum Loss Scenario	Maximum Loss = Long Call Strike Price - Short Call Strike Price - Net Premium Received	Strike Price of Long Call - Strike Price of Short Call - Net Premium Received + Commissions Paid
Risk	Unlimited	Limited
Reward	Limited	Limited

SHORT STRADDLE Vs IRON BUTTERFLY - Strategy Pros & Cons

	SHORT STRADDLE	IRON BUTTERFLY
Similar Strategies	Short Strangle	Long Put Butterfly, Neutral Calendar Spread
Disadvantage	• Unlimited risk. • If the price of the underlying asset moves in either direction then huge losses can occur.	• Large commissions involved. • Probability of losses are higher.
Advantages	• A trader can earn profit even when there is no volatility in the market . • Allows you to benefit from double time decay. • Trader can collect premium from puts and calls option .	• 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.