LONG CALL BUTTERFLY	PROTECTIVE PUT
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..	Protective Put Option Strategy Protective Put Strategy is a hedging strategy where trader guards himself from the downside risk. This strategy is adopted when a trader is long on the underlying asset but skeptical of the downside. He will buy one ATM Put Option to hedge his position. Now, if the underlying asset moves either up or down, the trader is in a safe position. Read more..

LONG CALL BUTTERFLY Vs PROTECTIVE PUT - Details

	LONG CALL BUTTERFLY	PROTECTIVE PUT
Market View	Neutral	Bullish
Type (CE/PE)	CE (Call Option)	PE (Put Option)
Number Of Positions	4	1
Strategy Level	Advance	Beginners
Reward Profile	Limited	Unlimited
Risk Profile	Limited	Limited
Breakeven Point	Upper Breakeven = Higher Strike Price - Net Premium, Lower Breakeven = Lower Strike Price + Net Premium	Purchase Price of Underlying + Premium Paid

LONG CALL BUTTERFLY Vs PROTECTIVE PUT - When & How to use ?

	LONG CALL BUTTERFLY	PROTECTIVE PUT
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 is adopted when a trader is long on the underlying asset but skeptical of the downside.
Action	Sell 2 ATM Call, Buy 1 ITM Call, Buy 1 OTM Call	Buy 1 ATM Put
Breakeven Point	Upper Breakeven = Higher Strike Price - Net Premium, Lower Breakeven = Lower Strike Price + Net Premium	Purchase Price of Underlying + Premium Paid

LONG CALL BUTTERFLY Vs PROTECTIVE PUT - Risk & Reward

	LONG CALL BUTTERFLY	PROTECTIVE PUT
Maximum Profit Scenario	Adjacent strikes - Net premium debit.	Price of Underlying - Purchase Price of Underlying - Premium Paid
Maximum Loss Scenario	Net Premium Paid	Premium Paid + Purchase Price of Underlying - Put Strike + Commissions Paid
Risk	Limited	Limited
Reward	Limited	Unlimited

LONG CALL BUTTERFLY Vs PROTECTIVE PUT - Strategy Pros & Cons

	LONG CALL BUTTERFLY	PROTECTIVE PUT
Similar Strategies	-	Long Call, Call Backspread
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.	• Value of protective put position decreases as time passes • Holding period of the protective put can be affected by the timing as a result tax rate on the profit or loss from the stock can be affected.
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 potential profit due to indefinitely rise in the underlying stock price . • This strategy allows you to hold on to your stocks while insuring against losses. • Hedging strategy, trader can guard himself from the downside risk.