STRAP	SHORT CALL BUTTERFLY
About Strategy	Strap Option Strategy  Strap Strategy is similar to Long Straddle, the only difference is the quantity traded. A trader will buy two Call Options and one Put Options. In this strategy, a trader is very bullish on the market and volatility on upside but wants to hedge himself in case the stock doesn’t perform as per his expectations. This strategy will make more profits compared to long straddle sin 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..

STRAP Vs SHORT CALL BUTTERFLY - Details

	STRAP	SHORT CALL BUTTERFLY
Market View	Neutral	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option)
Number Of Positions	3	4
Strategy Level	Beginners	Advance
Reward Profile	Profit Achieved When Price of Underlying > Strike Price of Calls/Puts + (Net Premium Paid/2) OR Price of Underlying < Strike Price of Calls/Puts - Net Premium Paid	Limited
Risk Profile	Max Loss Occurs When Price of Underlying = Strike Price of Calls/Puts	Limited
Breakeven Point	Strike Price of Calls/Puts + (Net Premium Paid/2)	Lower Break-even = Lower Strike Price + Net Premium, Upper Break-even = Higher Strike Price - Net Premium

STRAP Vs SHORT CALL BUTTERFLY - When & How to use ?

	STRAP	SHORT CALL BUTTERFLY
Market View	Neutral	Neutral
When to use?	This strategy is used when the investor is bullish on the stock and expects volatility in the near future.	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 2 ATM Call Option, Buy 1 ATM Put Option	Buy 2 ATM Call, Sell 1 ITM Call, Sell 1 OTM Call
Breakeven Point	Strike Price of Calls/Puts + (Net Premium Paid/2)	Lower Break-even = Lower Strike Price + Net Premium, Upper Break-even = Higher Strike Price - Net Premium

STRAP Vs SHORT CALL BUTTERFLY - Risk & Reward

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

STRAP Vs SHORT CALL BUTTERFLY - Strategy Pros & Cons

	STRAP	SHORT CALL BUTTERFLY
Similar Strategies	Strip, Short Put Ladder, Short Call Ladder	Long Straddle, Long Call Butterfly
Disadvantage	• To generate profit, there should be significant change in share price. • Expensive strategy.	• Limited rewards, usually offer smaller return. • Profitability depends on the significant movement of stocks and options prices.
Advantages	• Limited loss. • If share prices are moving then traders can book unlimited profit. • A trader can still book profit if the underlying falls substantially.	• 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.