THE COLLAR	LONG CALL BUTTERFLY
About Strategy	The Collar Option Strategy Collar Strategy is an extension to Covered Call Strategy. A trader, who is bullish in nature but has a very low risk appetite and wants to mitigate his risk will implement the Collar Strategy. Collar involves buying of stock in either Cash/Futures Market, buying an ATM Put Option & selling an OTM Call Option. The expiry dates of the op Read more..	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..

THE COLLAR Vs LONG CALL BUTTERFLY - Details

	THE COLLAR	LONG CALL BUTTERFLY
Market View	Bullish	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option) + Underlying	CE (Call Option)
Number Of Positions	3	4
Strategy Level	Advance	Advance
Reward Profile	Limited	Limited
Risk Profile	Limited	Limited
Breakeven Point	Price of Features - Call Premium + Put Premium	Upper Breakeven = Higher Strike Price - Net Premium, Lower Breakeven = Lower Strike Price + Net Premium

THE COLLAR Vs LONG CALL BUTTERFLY - When & How to use ?

	THE COLLAR	LONG CALL BUTTERFLY
Market View	Bullish	Neutral
When to use?	It should be used only in case where trader is certain about the bearish market view.	This strategy should be used when you're expecting no volatility in the price of the underlying.
Action	Buy Underlying, Buy 1 ATM Put Option, Sell 1 OTM Call Option	Sell 2 ATM Call, Buy 1 ITM Call, Buy 1 OTM Call
Breakeven Point	Price of Features - Call Premium + Put Premium	Upper Breakeven = Higher Strike Price - Net Premium, Lower Breakeven = Lower Strike Price + Net Premium

THE COLLAR Vs LONG CALL BUTTERFLY - Risk & Reward

	THE COLLAR	LONG CALL BUTTERFLY
Maximum Profit Scenario	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received	Adjacent strikes - Net premium debit.
Maximum Loss Scenario	Purchase Price of Underlying - Strike Price of Long Put - Net Premium Received	Net Premium Paid
Risk	Limited	Limited
Reward	Limited	Limited

THE COLLAR Vs LONG CALL BUTTERFLY - Strategy Pros & Cons

	THE COLLAR	LONG CALL BUTTERFLY
Similar Strategies	Call Spread, Bull Put Spread	-
Disadvantage	• Limited profit. • A trader can book more profit without this strategy if the prices goes high.	• 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.
Advantages	• This strategy protects the losses on underlying asset. • Risk gets limited if the price of the stocks goes down. • Trader can get ownership benefits life dividend and voting rights.	• 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.