LONG CALL BUTTERFLY	COVERED CALL
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..	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 Vs COVERED CALL - Details

	LONG CALL BUTTERFLY	COVERED CALL
Market View	Neutral	Bullish
Type (CE/PE)	CE (Call 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 = Higher Strike Price - Net Premium, Lower Breakeven = Lower Strike Price + Net Premium	Purchase Price of Underlying- Premium Received

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

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

LONG CALL BUTTERFLY Vs COVERED CALL - Risk & Reward

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

LONG CALL BUTTERFLY Vs COVERED CALL - Strategy Pros & Cons

	LONG CALL BUTTERFLY	COVERED CALL
Similar Strategies	-	Bull Call Spread
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, limited reward. • Inability to earn interest on the proceed used to buy the underlying stock.
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.	• 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.