SYNTHETIC LONG CALL	SHORT CALL BUTTERFLY
About Strategy	Synthetic Long Call Option Strategy A trader is bullish in nature for short term, but also fearful about the downside risk associated with it. Here, a trader wants to hold an underlying asset either in physical form like in case of commodities or demat (electronic) form in case of stocks. But he is always exposed to downside risk and in order to mitigate his losses, 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..

SYNTHETIC LONG CALL Vs SHORT CALL BUTTERFLY - Details

	SYNTHETIC LONG CALL	SHORT CALL BUTTERFLY
Market View	Bullish	Neutral
Type (CE/PE)	CE (Call Option)	CE (Call Option)
Number Of Positions	2	4
Strategy Level	Beginners	Advance
Reward Profile	When Price of Underlying > Purchase Price of Underlying + Premium Paid	Limited
Risk Profile	Limited (Maximum loss happens when the price of instrument move above from the strike price of put)	Limited
Breakeven Point	Underlying Price + Put Premium	Lower Break-even = Lower Strike Price + Net Premium, Upper Break-even = Higher Strike Price - Net Premium

SYNTHETIC LONG CALL Vs SHORT CALL BUTTERFLY - When & How to use ?

	SYNTHETIC LONG CALL	SHORT CALL BUTTERFLY
Market View	Bullish	Neutral
When to use?	A trader is bullish in nature for short term, but also fearful about the downside risk associated with it.	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 ATM Put or OTM Put	Buy 2 ATM Call, Sell 1 ITM Call, Sell 1 OTM Call
Breakeven Point	Underlying Price + Put Premium	Lower Break-even = Lower Strike Price + Net Premium, Upper Break-even = Higher Strike Price - Net Premium

SYNTHETIC LONG CALL Vs SHORT CALL BUTTERFLY - Risk & Reward

	SYNTHETIC LONG CALL	SHORT CALL BUTTERFLY
Maximum Profit Scenario	Current Price - Purchase Price - Premium Paid	The profit is limited to the net premium received.
Maximum Loss Scenario	Premium Paid	Higher strike price- Lower Strike Price - Net Premium
Risk	Limited	Limited
Reward	Unlimited	Limited

SYNTHETIC LONG CALL Vs SHORT CALL BUTTERFLY - Strategy Pros & Cons

	SYNTHETIC LONG CALL	SHORT CALL BUTTERFLY
Similar Strategies	Protective Put, Long Call	Long Straddle, Long Call Butterfly
Disadvantage	•Chances of loss if the underlying goes down. •Incur losses if option is exercised.	• Limited rewards, usually offer smaller return. • Profitability depends on the significant movement of stocks and options prices.
Advantages	•Limited risk, unlimited profit. •Protection to your long-term holdings. • Limited loss to the to the premium paid for Put option.	• 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.