THE COLLAR	SHORT STRANGLE
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..	Short Strangle Option Strategy  This strategy is similar to Short Straddle; the only difference is of the strike prices at which the positions are built. Short Strangle involves selling of one OTM Call Option and selling of one OTM Put Option, of the same expiry date and same underlying asset. Here the probability of making profits is more as there is a spread between the two strike prices, and if .. Read more..

THE COLLAR Vs SHORT STRANGLE - Details

	THE COLLAR	SHORT STRANGLE
Market View	Bullish	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option) + Underlying	CE (Call Option) + PE (Put Option)
Number Of Positions	3	2
Strategy Level	Advance	Advance
Reward Profile	Limited	Limited
Risk Profile	Limited	Unlimited
Breakeven Point	Price of Features - Call Premium + Put Premium	Lower Break-even = Strike Price of Put - Net Premium, Upper Break-even = Strike Price of Call+ Net Premium

THE COLLAR Vs SHORT STRANGLE - When & How to use ?

	THE COLLAR	SHORT STRANGLE
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 perfect in a neutral market scenario when the underlying is expected to be less volatile.
Action	Buy Underlying, Buy 1 ATM Put Option, Sell 1 OTM Call Option	Sell OTM Call, Sell OTM Put
Breakeven Point	Price of Features - Call Premium + Put Premium	Lower Break-even = Strike Price of Put - Net Premium, Upper Break-even = Strike Price of Call+ Net Premium

THE COLLAR Vs SHORT STRANGLE - Risk & Reward

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

THE COLLAR Vs SHORT STRANGLE - Strategy Pros & Cons

	THE COLLAR	SHORT STRANGLE
Similar Strategies	Call Spread, Bull Put Spread	Short Straddle, Long Strangle
Disadvantage	• Limited profit. • A trader can book more profit without this strategy if the prices goes high.	• Unlimited loss is associated with this strategy, not recommended for beginners. • Limited reward amount.
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.	• Higher chance of profitability due to selling of OTM options. • Advantage from double time decay and a contraction in volatility. • Traders can book profit when underlying asset stays within a tight trading range.