THE COLLAR	THE COLLAR
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..	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..

THE COLLAR Vs THE COLLAR - Details

	THE COLLAR	THE COLLAR
Market View	Bullish	Bullish
Type (CE/PE)	CE (Call Option) + PE (Put Option) + Underlying	CE (Call Option) + PE (Put Option) + Underlying
Number Of Positions	3	3
Strategy Level	Advance	Advance
Reward Profile	Limited	Limited
Risk Profile	Limited	Limited
Breakeven Point	Price of Features - Call Premium + Put Premium	Price of Features - Call Premium + Put Premium

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

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

THE COLLAR Vs THE COLLAR - Risk & Reward

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

THE COLLAR Vs THE COLLAR - Strategy Pros & Cons

	THE COLLAR	THE COLLAR
Similar Strategies	Call Spread, Bull Put Spread	Call Spread, Bull Put Spread
Disadvantage	• Limited profit. • A trader can book more profit without this strategy if the prices goes high.	• Limited profit. • A trader can book more profit without this strategy if the prices goes high.
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.	• 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.