LONG CALL BUTTERFLY	RISK REVERSAL
About Strategy	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..	Risk Reversal Option Strategy This strategy protects an investor from unfavourable price movements in the position but limits the profits can be made on that position. A risk reversal is a hedging strategy that protects a long or short position by using put and call options. In this one option is buying and other is written. In this strategy the trader has to pay a premium, while the written option prod .. Read more..

LONG CALL BUTTERFLY Vs RISK REVERSAL - Details

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

LONG CALL BUTTERFLY Vs RISK REVERSAL - When & How to use ?

	LONG CALL BUTTERFLY	RISK REVERSAL
Market View	Neutral	Bullish
When to use?	This strategy should be used when you're expecting no volatility in the price of the underlying.	This strategy can be used for hedging. When an investor want to protect long or short position by using a call and put option.
Action	Sell 2 ATM Call, Buy 1 ITM Call, Buy 1 OTM Call	This strategy work when an investor want to hedge their position by buying a put option and selling a call option.
Breakeven Point	Upper Breakeven = Higher Strike Price - Net Premium, Lower Breakeven = Lower Strike Price + Net Premium	Premium received - Put Strike Price

LONG CALL BUTTERFLY Vs RISK REVERSAL - Risk & Reward

	LONG CALL BUTTERFLY	RISK REVERSAL
Maximum Profit Scenario	Adjacent strikes - Net premium debit.	You have unlimited profit potential to the upside.
Maximum Loss Scenario	Net Premium Paid	You have nearly unlimited downside risk as well because you are short the put
Risk	Limited	Unlimited
Reward	Limited	Unlimited

LONG CALL BUTTERFLY Vs RISK REVERSAL - Strategy Pros & Cons

	LONG CALL BUTTERFLY	RISK REVERSAL
Similar Strategies	-	-
Disadvantage	• 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.	Unlimited Risk.
Advantages	• 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.	Unlimited profit.