REVERSE IRON BUTTERFLY	COVERED COMBINATION
About Strategy	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 Combination Option Strategy This strategy involves selling OTM Call & Put Options and buying the underlying asset in either cash or futures market. It is also known as Covered Strangle as the profits are capped and risk is potentially unlimited. Risk: Un .. Read more..

REVERSE IRON BUTTERFLY Vs COVERED COMBINATION - Details

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

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

	REVERSE IRON BUTTERFLY	COVERED COMBINATION
Market View	Neutral	Bullish
When to use?	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.	This strategy is mainly suited for investors who are moderately bullish on a stock and are comfortable with increasing their position in the event of a price decline.
Action	Sell 1 OTM Put, Buy 1 ATM Put, Buy 1 ATM Call, Sell 1 OTM Call	Sell 1 OTM Call, Sell 1 OTM Put
Breakeven Point	Upper Breakeven Point = Strike Price of Long Call + Net Premium Paid, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

REVERSE IRON BUTTERFLY Vs COVERED COMBINATION - Risk & Reward

	REVERSE IRON BUTTERFLY	COVERED COMBINATION
Maximum Profit Scenario	Strike Price of Short Call (or Long Put) - Strike Price of Long Call (or Short Put) - Net Premium Paid - Commissions Paid	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received - Commissions Paid
Maximum Loss Scenario	Net Premium Paid + Commissions Paid	Purchase Price of Underlying + Strike Price of Short Put - (2 x Price of Underlying) - Max Profit + Commissions Paid
Risk	Limited	Unlimited
Reward	Limited	Limited

REVERSE IRON BUTTERFLY Vs COVERED COMBINATION - Strategy Pros & Cons

	REVERSE IRON BUTTERFLY	COVERED COMBINATION
Similar Strategies	Short Put Butterfly, Short Condor	Stock Repair Strategy
Disadvantage	• Potential loss is higher than gain, complex strategy. • Not suitable for beginners.	Combinations can be profitable in sideways or rising markets. Greater combined net credit increases downside protection and potential return.
Advantages	• 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.	Limited Maximum Profit on the upside. Covered Combinations should only be traded on stocks that are bullish.