COVERED CALL	LONG CALL BUTTERFLY
About Strategy	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..	Long Call Butterfly Option Strategy A trader, who is neutral in nature and believes that there will be very low volatility i.e. expects the market to remain range bound, will implement this strategy. This strategy involves selling of 2 ATM Call Options, buying 1 ITM Call Option & buying 1 OTM Call Option of the same expiry date & same underlying asset. The difference between the strikes sho .. Read more..

COVERED CALL Vs LONG CALL BUTTERFLY - Details

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

COVERED CALL Vs LONG CALL BUTTERFLY - When & How to use ?

	COVERED CALL	LONG CALL BUTTERFLY
Market View	Bullish	Neutral
When to use?	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.	This strategy should be used when you're expecting no volatility in the price of the underlying.
Action	(Buy Underlying) (Sell OTM Call Option)	Sell 2 ATM Call, Buy 1 ITM Call, Buy 1 OTM Call
Breakeven Point	Purchase Price of Underlying- Premium Received	Upper Breakeven = Higher Strike Price - Net Premium, Lower Breakeven = Lower Strike Price + Net Premium

COVERED CALL Vs LONG CALL BUTTERFLY - Risk & Reward

	COVERED CALL	LONG CALL BUTTERFLY
Maximum Profit Scenario	[Call Strike Price - Stock Price Paid] + Premium Received	Adjacent strikes - Net premium debit.
Maximum Loss Scenario	Purchase Price of Underlying - Price of Underlying) + Premium Received	Net Premium Paid
Risk	Unlimited	Limited
Reward	Limited	Limited

COVERED CALL Vs LONG CALL BUTTERFLY - Strategy Pros & Cons

	COVERED CALL	LONG CALL BUTTERFLY
Similar Strategies	Bull Call Spread	-
Disadvantage	• Unlimited risk, limited reward. • Inability to earn interest on the proceed used to buy the underlying stock.	• Due to limited lifespan of call options, you can lose the premium paid. • Limited profit which is bound in a narrow range between the two wing strikes.
Advantages	• 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.	• Under this strategy, a trader can book profit even when there is not volatility in the market. • Limited risks to the net premium paid. • This strategy allows you to gain more profits by investing less and limiting your losses to minimum.