STRAP	REVERSE IRON BUTTERFLY
About Strategy	Strap Option Strategy  Strap Strategy is similar to Long Straddle, the only difference is the quantity traded. A trader will buy two Call Options and one Put Options. In this strategy, a trader is very bullish on the market and volatility on upside but wants to hedge himself in case the stock doesn’t perform as per his expectations. This strategy will make more profits compared to long straddle sin 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..

STRAP Vs REVERSE IRON BUTTERFLY - Details

	STRAP	REVERSE IRON BUTTERFLY
Market View	Neutral	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	3	4
Strategy Level	Beginners	Advance
Reward Profile	Profit Achieved When Price of Underlying > Strike Price of Calls/Puts + (Net Premium Paid/2) OR Price of Underlying < Strike Price of Calls/Puts - Net Premium Paid	Limited
Risk Profile	Max Loss Occurs When Price of Underlying = Strike Price of Calls/Puts	Limited
Breakeven Point	Strike Price of Calls/Puts + (Net Premium Paid/2)	Upper Breakeven Point = Strike Price of Long Call + Net Premium Paid, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid

STRAP Vs REVERSE IRON BUTTERFLY - When & How to use ?

	STRAP	REVERSE IRON BUTTERFLY
Market View	Neutral	Neutral
When to use?	This strategy is used when the investor is bullish on the stock and expects volatility in the near future.	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 2 ATM Call Option, Buy 1 ATM Put Option	Sell 1 OTM Put, Buy 1 ATM Put, Buy 1 ATM Call, Sell 1 OTM Call
Breakeven Point	Strike Price of Calls/Puts + (Net Premium Paid/2)	Upper Breakeven Point = Strike Price of Long Call + Net Premium Paid, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid

STRAP Vs REVERSE IRON BUTTERFLY - Risk & Reward

	STRAP	REVERSE IRON BUTTERFLY
Maximum Profit Scenario	UNLIMITED	Strike Price of Short Call (or Long Put) - Strike Price of Long Call (or Short Put) - Net Premium Paid - Commissions Paid
Maximum Loss Scenario	Net Premium Paid	Net Premium Paid + Commissions Paid
Risk	Limited	Limited
Reward	Unlimited	Limited

STRAP Vs REVERSE IRON BUTTERFLY - Strategy Pros & Cons

	STRAP	REVERSE IRON BUTTERFLY
Similar Strategies	Strip, Short Put Ladder, Short Call Ladder	Short Put Butterfly, Short Condor
Disadvantage	• To generate profit, there should be significant change in share price. • Expensive strategy.	• Potential loss is higher than gain, complex strategy. • Not suitable for beginners.
Advantages	• Limited loss. • If share prices are moving then traders can book unlimited profit. • A trader can still book profit if the underlying falls substantially.	• 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.