REVERSE IRON BUTTERFLY	COVERED CALL
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 Call Option Strategy Mr. X owns Reliance Shares and expects the price to rise in the near future. Mr. X is entitled to receive dividends for the shares he hold in cash market. Covered Call Strategy involves selling of OTM Call Option of the same underlying asset. The OTM Call Option Strike Price will generally be the price, where Mr. X will look to get out o .. Read more..

REVERSE IRON BUTTERFLY Vs COVERED CALL - Details

	REVERSE IRON BUTTERFLY	COVERED CALL
Market View	Neutral	Bullish
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call 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- Premium Received

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

	REVERSE IRON BUTTERFLY	COVERED CALL
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.	An investor has a short term neutral view on the asset and for this reason holds the asset long and has a short position to generate income.
Action	Sell 1 OTM Put, Buy 1 ATM Put, Buy 1 ATM Call, Sell 1 OTM Call	(Buy Underlying) (Sell OTM Call Option)
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- Premium Received

REVERSE IRON BUTTERFLY Vs COVERED CALL - Risk & Reward

	REVERSE IRON BUTTERFLY	COVERED CALL
Maximum Profit Scenario	Strike Price of Short Call (or Long Put) - Strike Price of Long Call (or Short Put) - Net Premium Paid - Commissions Paid	[Call Strike Price - Stock Price Paid] + Premium Received
Maximum Loss Scenario	Net Premium Paid + Commissions Paid	Purchase Price of Underlying - Price of Underlying) + Premium Received
Risk	Limited	Unlimited
Reward	Limited	Limited

REVERSE IRON BUTTERFLY Vs COVERED CALL - Strategy Pros & Cons

	REVERSE IRON BUTTERFLY	COVERED CALL
Similar Strategies	Short Put Butterfly, Short Condor	Bull Call Spread
Disadvantage	• Potential loss is higher than gain, complex strategy. • Not suitable for beginners.	• Unlimited risk, limited reward. • Inability to earn interest on the proceed used to buy the underlying stock.
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.	• Profit from option premium, rise in the underlying stock and dividends on the stock. • Allows you to generate income from your holding. • Profit when underlying stock price rise, move sideways or marginal fall.