THE COLLAR	SHORT CALL
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..	Short Call Option Strategy A trader shorts or writes a Call Option when he feels that underlying stock price is likely to go down. Selling Call Option is a strategy preferred for experienced traders. However this strategy is very risky in nature. If the stock rallies on the upside, your risk becomes potentially unquantifiable and unlimited. If the strategy .. Read more..

THE COLLAR Vs SHORT CALL - Details

	THE COLLAR	SHORT CALL
Market View	Bullish	Bearish
Type (CE/PE)	CE (Call Option) + PE (Put Option) + Underlying	CE (Call Option)
Number Of Positions	3	1
Strategy Level	Advance	Advance
Reward Profile	Limited	Limited
Risk Profile	Limited	Unlimited
Breakeven Point	Price of Features - Call Premium + Put Premium	Strike Price of Short Call + Premium Received

THE COLLAR Vs SHORT CALL - When & How to use ?

	THE COLLAR	SHORT CALL
Market View	Bullish	Bearish
When to use?	It should be used only in case where trader is certain about the bearish market view.	It is an aggressive strategy and involves huge risks. It should be used only in case where trader is certain about the bearish market view on the underlying.
Action	Buy Underlying, Buy 1 ATM Put Option, Sell 1 OTM Call Option	Sell or Write Call Option
Breakeven Point	Price of Features - Call Premium + Put Premium	Strike Price of Short Call + Premium Received

THE COLLAR Vs SHORT CALL - Risk & Reward

	THE COLLAR	SHORT CALL
Maximum Profit Scenario	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received	Max Profit = Premium Received
Maximum Loss Scenario	Purchase Price of Underlying - Strike Price of Long Put - Net Premium Received	Loss Occurs When Price of Underlying > Strike Price of Short Call + Premium Received
Risk	Limited	Unlimited
Reward	Limited	Limited

THE COLLAR Vs SHORT CALL - Strategy Pros & Cons

	THE COLLAR	SHORT CALL
Similar Strategies	Call Spread, Bull Put Spread	Covered Put, Covered Calls
Disadvantage	• Limited profit. • A trader can book more profit without this strategy if the prices goes high.	• Unlimited risk to the upside underlying stocks. • Potential loss more than the premium collected.
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.	• With the help of this strategy, traders can book profit from falling prices in the underlying asset. • Less investment, more profit. • Traders can book profit when underlying stock price fall, move sideways or rise by a small amount.