RATIO CALL WRITE	SHORT CALL BUTTERFLY
About Strategy	Ratio Call Write Option Strategy  This strategy involves buying of an underlying asset in the cash/futures market and simultaneously selling ATM Calls double the number of long quantity. This strategy is used by a trader who is neutral on the market and bearish on the volatility in the near future. Here profits will be capped up to the premium amount and risk will be potentially unlimited. 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..

RATIO CALL WRITE Vs SHORT CALL BUTTERFLY - Details

	RATIO CALL WRITE	SHORT CALL BUTTERFLY
Market View	Neutral	Neutral
Type (CE/PE)	CE (Call Option)	CE (Call Option)
Number Of Positions	2	4
Strategy Level	Beginners	Advance
Reward Profile	Limited	Limited
Risk Profile	Unlimited	Limited
Breakeven Point	Upper Breakeven Point = Strike Price of Short Calls + Points of Maximum Profit, Lower Breakeven Point = Strike Price of Short Calls - Points of Maximum Profit	Lower Break-even = Lower Strike Price + Net Premium, Upper Break-even = Higher Strike Price - Net Premium

RATIO CALL WRITE Vs SHORT CALL BUTTERFLY - When & How to use ?

	RATIO CALL WRITE	SHORT CALL BUTTERFLY
Market View	Neutral	Neutral
When to use?	This strategy is used by a trader who is neutral on the market and bearish on the 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	Sell 2 ATM Calls	Buy 2 ATM Call, Sell 1 ITM Call, Sell 1 OTM Call
Breakeven Point	Upper Breakeven Point = Strike Price of Short Calls + Points of Maximum Profit, Lower Breakeven Point = Strike Price of Short Calls - Points of Maximum Profit	Lower Break-even = Lower Strike Price + Net Premium, Upper Break-even = Higher Strike Price - Net Premium

RATIO CALL WRITE Vs SHORT CALL BUTTERFLY - Risk & Reward

	RATIO CALL WRITE	SHORT CALL BUTTERFLY
Maximum Profit Scenario	Net Premium Received - Commissions Paid	The profit is limited to the net premium received.
Maximum Loss Scenario	Price of Underlying - Strike Price of Short Call - Net Premium Received OR Purchase Price of Underlying - Price of Underlying - Net Premium Received + Commissions Paid	Higher strike price- Lower Strike Price - Net Premium
Risk	Unlimited	Limited
Reward	Limited	Limited

RATIO CALL WRITE Vs SHORT CALL BUTTERFLY - Strategy Pros & Cons

	RATIO CALL WRITE	SHORT CALL BUTTERFLY
Similar Strategies	Variable Ratio Write	Long Straddle, Long Call Butterfly
Disadvantage	• Potential loss is higher than gain. • Limited profit.	• Limited rewards, usually offer smaller return. • Profitability depends on the significant movement of stocks and options prices.
Advantages		• 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.