CALL BACKSPREAD	IRON BUTTERFLY
About Strategy	Call Backspread Option Trading  This strategy is adopted by traders who are bullish in nature. He expects market and volatility to rise in the near future. A trader need not be direction specific here (i.e. an upward or downward trend, but a small bias towards an uptrend should always be present, as the gains will be much higher once the market moves up r Read more..	Iron Butterfly Option Strategy  This strategy is implemented when a trader is bearish on the volatility of market and neutral on the market movements. A trader will buy 1 OTM Put Option, sell 1 ATM Put Option, sell 1 ATM Call Option, buy 1 OTM Call Option. Due to offsetting of long and short positions, this strategy bags limited profit with limited risk. Read more..

CALL BACKSPREAD Vs IRON BUTTERFLY - Details

	CALL BACKSPREAD	IRON BUTTERFLY
Market View	Bullish	Neutral
Type (CE/PE)	CE (Call Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	3	4
Strategy Level	Advance	Advance
Reward Profile	Unlimited	Limited
Risk Profile	Limited	Limited
Breakeven Point	Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss	Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received

CALL BACKSPREAD Vs IRON BUTTERFLY - When & How to use ?

	CALL BACKSPREAD	IRON BUTTERFLY
Market View	Bullish	Neutral
When to use?	This strategy is used when the investor expects the price of the stock to rise in the future.	This strategy is implemented when a trader is bearish on the volatility of market and neutral on the market movements.
Action	Sell 1 ITM Call, BUY 2 OTM Call	Buy 1 OTM Put, Sell 1 ATM Put, Sell 1 ATM Call, Buy 1 OTM Call
Breakeven Point	Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss	Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received

CALL BACKSPREAD Vs IRON BUTTERFLY - Risk & Reward

	CALL BACKSPREAD	IRON BUTTERFLY
Maximum Profit Scenario	Unlimited profit potential if the stock goes in upward direction.	Net Premium Received - Commissions Paid
Maximum Loss Scenario	Strike Price of long call - Strike Price of short call - Net premium received	Strike Price of Long Call - Strike Price of Short Call - Net Premium Received + Commissions Paid
Risk	Limited	Limited
Reward	Unlimited	Limited

CALL BACKSPREAD Vs IRON BUTTERFLY - Strategy Pros & Cons

	CALL BACKSPREAD	IRON BUTTERFLY
Similar Strategies	-	Long Put Butterfly, Neutral Calendar Spread
Disadvantage		• Large commissions involved. • Probability of losses are higher.
Advantages	• Unlimited profit potential.	• Less amount of capital investment, steady income with low risk. • Traders can predict maximum loss and profit. • Versatile strategy, investors can transform position into bear call spread or bull put spread easily.