THE COLLAR	STRAP
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..	Strap Option Strategy  Strap Strategy is similar to Long Straddle, the only difference is the quantity traded. A trader will buy two Call Options and one Put Options. In this strategy, a trader is very bullish on the market and volatility on upside but wants to hedge himself in case the stock doesn’t perform as per his expectations. This strategy will make more profits compared to long straddle sin .. Read more..

THE COLLAR Vs STRAP - Details

	THE COLLAR	STRAP
Market View	Bullish	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option) + Underlying	CE (Call Option) + PE (Put Option)
Number Of Positions	3	3
Strategy Level	Advance	Beginners
Reward Profile	Limited	Profit Achieved When Price of Underlying > Strike Price of Calls/Puts + (Net Premium Paid/2) OR Price of Underlying < Strike Price of Calls/Puts - Net Premium Paid
Risk Profile	Limited	Max Loss Occurs When Price of Underlying = Strike Price of Calls/Puts
Breakeven Point	Price of Features - Call Premium + Put Premium	Strike Price of Calls/Puts + (Net Premium Paid/2)

THE COLLAR Vs STRAP - When & How to use ?

	THE COLLAR	STRAP
Market View	Bullish	Neutral
When to use?	It should be used only in case where trader is certain about the bearish market view.	This strategy is used when the investor is bullish on the stock and expects volatility in the near future.
Action	Buy Underlying, Buy 1 ATM Put Option, Sell 1 OTM Call Option	Buy 2 ATM Call Option, Buy 1 ATM Put Option
Breakeven Point	Price of Features - Call Premium + Put Premium	Strike Price of Calls/Puts + (Net Premium Paid/2)

THE COLLAR Vs STRAP - Risk & Reward

	THE COLLAR	STRAP
Maximum Profit Scenario	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received	UNLIMITED
Maximum Loss Scenario	Purchase Price of Underlying - Strike Price of Long Put - Net Premium Received	Net Premium Paid
Risk	Limited	Limited
Reward	Limited	Unlimited

THE COLLAR Vs STRAP - Strategy Pros & Cons

	THE COLLAR	STRAP
Similar Strategies	Call Spread, Bull Put Spread	Strip, Short Put Ladder, Short Call Ladder
Disadvantage	• Limited profit. • A trader can book more profit without this strategy if the prices goes high.	• To generate profit, there should be significant change in share price. • Expensive strategy.
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.	• Limited loss. • If share prices are moving then traders can book unlimited profit. • A trader can still book profit if the underlying falls substantially.