COVERED CALL	REVERSE IRON 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..	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 Vs REVERSE IRON BUTTERFLY - Details

	COVERED CALL	REVERSE IRON BUTTERFLY
Market View	Bullish	Neutral
Type (CE/PE)	CE (Call Option)	CE (Call Option) + PE (Put 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 Point = Strike Price of Long Call + Net Premium Paid, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid

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

	COVERED CALL	REVERSE IRON 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 is used when a trader is bullish on volatility and expects the market to make significant move in the near future in either directions.
Action	(Buy Underlying) (Sell OTM Call Option)	Sell 1 OTM Put, Buy 1 ATM Put, Buy 1 ATM Call, Sell 1 OTM Call
Breakeven Point	Purchase Price of Underlying- Premium Received	Upper Breakeven Point = Strike Price of Long Call + Net Premium Paid, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid

COVERED CALL Vs REVERSE IRON BUTTERFLY - Risk & Reward

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

COVERED CALL Vs REVERSE IRON BUTTERFLY - Strategy Pros & Cons

	COVERED CALL	REVERSE IRON BUTTERFLY
Similar Strategies	Bull Call Spread	Short Put Butterfly, Short Condor
Disadvantage	• Unlimited risk, limited reward. • Inability to earn interest on the proceed used to buy the underlying stock.	• Potential loss is higher than gain, complex strategy. • Not suitable for beginners.
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.	• 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.