LONG PUT	PROTECTIVE COLLAR
About Strategy	Long Put Option Strategy This strategy is implemented by buying 1 Put Option i.e. a single position, when the person is bearish on the market and expects the market to move downwards in the near future. Risk: The maximum loss will be the premium amount paid.< Read more..	Protective Collar Strategy This Strategy is implemented when the investor requires downside protection for the short - to medium term but at lower cost. Buying protective puts can be an expensive proposition and writing OTM calls can defray the cost of the puts quite substantially. Protective Collar is considered as bearish to neutral strategy. In this strategy risk and reward is both are limited. This .. Read more..

LONG PUT Vs PROTECTIVE COLLAR - Details

	LONG PUT	PROTECTIVE COLLAR
Market View	Bearish	Neutral
Type (CE/PE)	PE (Put Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	1	2
Strategy Level	Beginners	Beginners
Reward Profile	Unlimited	Limited
Risk Profile	Limited	Limited
Breakeven Point	Strike Price of Long Put - Premium Paid	Purchase Price of Underlying + Net Premium Paid

LONG PUT Vs PROTECTIVE COLLAR - When & How to use ?

	LONG PUT	PROTECTIVE COLLAR
Market View	Bearish	Neutral
When to use?	A long put option strategy works well when you're expecting the underlying asset to sharply decline or be volatile in near future.	This Strategy is implemented when the investor requires downside protection for the short - to medium term but at lower cost.
Action	Buy Put Option	• Short 1 Call Option, • Long 1 Put Option
Breakeven Point	Strike Price of Long Put - Premium Paid	Purchase Price of Underlying + Net Premium Paid

LONG PUT Vs PROTECTIVE COLLAR - Risk & Reward

	LONG PUT	PROTECTIVE COLLAR
Maximum Profit Scenario	Profit = Strike Price of Long Put - Premium Paid	• Call strike - stock purchase price - net premium paid + net credit received
Maximum Loss Scenario	Max Loss = Premium Paid + Commissions Paid	• Stock purchase price - put strike - net premium paid - put strike + net credit received
Risk	Limited	Limited
Reward	Unlimited	Limited

LONG PUT Vs PROTECTIVE COLLAR - Strategy Pros & Cons

	LONG PUT	PROTECTIVE COLLAR
Similar Strategies	Protective Call, Short Put	Bull Put Spread, Bull Call Spread
Disadvantage	• 100% loss if strike price, expiration dates or underlying stocks are badly chosen. • Time decay.	• Potential profit is lower or limited.
Advantages	• Limited risk to the premium paid. • Less capital investment and more profit. • Unlimited profit potential with limited risk.	The Risk is limited.