PROTECTIVE CALL	SHORT CALL BUTTERFLY
About Strategy	Protective Call Option Strategy This strategy is simply the reversal of the Synthetic Call Strategy. This strategy is implemented when a trader is bearish on the market and expects to go down. Trader will short underlying stock in the cash market and buy either an ATM Call Option or OTM Call Option. The Call Option is bought to protect / hedge the upside risk on the short position. The Read more..	Short Call Butterfly Option Strategy This strategy is opposite of the Long Call Butterfly Strategy, a trader expects the market to remain range bound in Long Call Butterfly, but here he expects the market to move beyond strike boundaries in Short Call Butterfly. If the trader is bullish on the market’s volatility, he will implement this strategy. Here also there should be equal distance between the .. Read more..

PROTECTIVE CALL Vs SHORT CALL BUTTERFLY - Details

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

PROTECTIVE CALL Vs SHORT CALL BUTTERFLY - When & How to use ?

	PROTECTIVE CALL	SHORT CALL BUTTERFLY
Market View	Bearish	Neutral
When to use?	This strategy is implemented when a trader is bearish on the market and expects to go down.	This strategy is meant for special scenarios where you foresee a lot of volatility in the market due to election results, budget, policy change, annual result announcements etc.
Action	Buy 1 ATM Call	Buy 2 ATM Call, Sell 1 ITM Call, Sell 1 OTM Call
Breakeven Point	Sale Price of Underlying + Premium Paid	Lower Break-even = Lower Strike Price + Net Premium, Upper Break-even = Higher Strike Price - Net Premium

PROTECTIVE CALL Vs SHORT CALL BUTTERFLY - Risk & Reward

	PROTECTIVE CALL	SHORT CALL BUTTERFLY
Maximum Profit Scenario	Sale Price of Underlying - Price of Underlying - Premium Paid	The profit is limited to the net premium received.
Maximum Loss Scenario	Premium Paid + Call Strike Price - Sale Price of Underlying + Commissions Paid	Higher strike price- Lower Strike Price - Net Premium
Risk	Limited	Limited
Reward	Unlimited	Limited

PROTECTIVE CALL Vs SHORT CALL BUTTERFLY - Strategy Pros & Cons

	PROTECTIVE CALL	SHORT CALL BUTTERFLY
Similar Strategies	Put Backspread, Long Put	Long Straddle, Long Call Butterfly
Disadvantage	• Profitable when market moves as expected. • Not good for beginners.	• Limited rewards, usually offer smaller return. • Profitability depends on the significant movement of stocks and options prices.
Advantages	• Limited risk if the market moves in opposite direction as expected. • Allows you to keep open a profitable position to make further profits. • Unlimited profit potential.	• Even if the market is highly volatile, the risk exposure remains limited. • Without any extra investment, you can receive your premium. • Able to book profits even when the price movement cannot be predicted.