SHORT PUT	PROTECTIVE COLLAR
About Strategy	Short Put Option Strategy A trader will short put if he is bullish in nature and expects the underlying asset not to fall below a certain level. Risk: Losses will be potentially unlimited if the stock skyrockets above the strike price of put. 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..

SHORT PUT Vs PROTECTIVE COLLAR - Details

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

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

	SHORT PUT	PROTECTIVE COLLAR
Market View	Bullish	Neutral
When to use?	This strategy works well when you're Bullish that the price of the underlying will not fall beyond a certain level.	This Strategy is implemented when the investor requires downside protection for the short - to medium term but at lower cost.
Action	Sell Put Option	• Short 1 Call Option, • Long 1 Put Option
Breakeven Point	Strike Price - Premium	Purchase Price of Underlying + Net Premium Paid

SHORT PUT Vs PROTECTIVE COLLAR - Risk & Reward

	SHORT PUT	PROTECTIVE COLLAR
Maximum Profit Scenario	Premium received in your account when you sell the Put Option.	• Call strike - stock purchase price - net premium paid + net credit received
Maximum Loss Scenario	Unlimited (When the price of the underlying falls.)	• Stock purchase price - put strike - net premium paid - put strike + net credit received
Risk	Unlimited	Limited
Reward	Limited	Limited

SHORT PUT Vs PROTECTIVE COLLAR - Strategy Pros & Cons

	SHORT PUT	PROTECTIVE COLLAR
Similar Strategies	Bull Put Spread, Short Starddle	Bull Put Spread, Bull Call Spread
Disadvantage	• Unlimited risk. • Huge losses if the price of the underlying stock falls steeply.	• Potential profit is lower or limited.
Advantages	• Benefit from time decay. • Less capital required than buying the stock outright. • Profit when underlying stock price rise, move sideways or drop by a relatively small account.	The Risk is limited.