LONG PUT	THE 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..	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 PUT Vs THE COLLAR - Details

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

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

	LONG PUT	THE COLLAR
Market View	Bearish	Bullish
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.	It should be used only in case where trader is certain about the bearish market view.
Action	Buy Put Option	Buy Underlying, Buy 1 ATM Put Option, Sell 1 OTM Call Option
Breakeven Point	Strike Price of Long Put - Premium Paid	Price of Features - Call Premium + Put Premium

LONG PUT Vs THE COLLAR - Risk & Reward

	LONG PUT	THE COLLAR
Maximum Profit Scenario	Profit = Strike Price of Long Put - Premium Paid	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received
Maximum Loss Scenario	Max Loss = Premium Paid + Commissions Paid	Purchase Price of Underlying - Strike Price of Long Put - Net Premium Received
Risk	Limited	Limited
Reward	Unlimited	Limited

LONG PUT Vs THE COLLAR - Strategy Pros & Cons

	LONG PUT	THE COLLAR
Similar Strategies	Protective Call, Short Put	Call Spread, Bull Put Spread
Disadvantage	• 100% loss if strike price, expiration dates or underlying stocks are badly chosen. • Time decay.	• Limited profit. • A trader can book more profit without this strategy if the prices goes high.
Advantages	• Limited risk to the premium paid. • Less capital investment and more profit. • Unlimited profit potential with limited risk.	• 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.