CALL BACKSPREAD	THE COLLAR
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..	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..

CALL BACKSPREAD Vs THE COLLAR - Details

	CALL BACKSPREAD	THE COLLAR
Market View	Bullish	Bullish
Type (CE/PE)	CE (Call Option)	CE (Call Option) + PE (Put Option) + Underlying
Number Of Positions	3	3
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	Price of Features - Call Premium + Put Premium

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

	CALL BACKSPREAD	THE COLLAR
Market View	Bullish	Bullish
When to use?	This strategy is used when the investor expects the price of the stock to rise in the future.	It should be used only in case where trader is certain about the bearish market view.
Action	Sell 1 ITM Call, BUY 2 OTM Call	Buy Underlying, Buy 1 ATM Put Option, Sell 1 OTM Call Option
Breakeven Point	Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss	Price of Features - Call Premium + Put Premium

CALL BACKSPREAD Vs THE COLLAR - Risk & Reward

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

CALL BACKSPREAD Vs THE COLLAR - Strategy Pros & Cons

	CALL BACKSPREAD	THE COLLAR
Similar Strategies	-	Call Spread, Bull Put Spread
Disadvantage		• Limited profit. • A trader can book more profit without this strategy if the prices goes high.
Advantages	• Unlimited profit potential.	• 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.