RATIO CALL SPREAD	PROTECTIVE COLLAR
About Strategy	Ratio Call Spread Option Strategy  As the name suggests, a ratio of 2:1 is followed i.e. buy 1 ITM Call and simultaneously sell OTM Calls double the number of ITM Calls (In this case 2). This strategy is used by trader who is neutral on the market and bearish on the volatility in the near future. Here profits will be capped up to the premium amount and risk will be potentially unlimited since he is 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..

RATIO CALL SPREAD Vs PROTECTIVE COLLAR - Details

	RATIO CALL SPREAD	PROTECTIVE COLLAR
Market View	Neutral	Neutral
Type (CE/PE)	CE (Call Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	3	2
Strategy Level	Beginners	Beginners
Reward Profile	Limited	Limited
Risk Profile	Unlimited	Limited
Breakeven Point	Upper Breakeven Point = Strike Price of Short Calls + (Points of Maximum Profit / Number of Uncovered Calls), Lower Breakeven Point = Strike Price of Long Call +/- Net Premium Paid or Received	Purchase Price of Underlying + Net Premium Paid

RATIO CALL SPREAD Vs PROTECTIVE COLLAR - When & How to use ?

	RATIO CALL SPREAD	PROTECTIVE COLLAR
Market View	Neutral	Neutral
When to use?	This strategy is used by trader who is neutral on the market and bearish on the volatility in the near future. Here profits will be capped up to the premium amount and risk will be potentially unlimited since he is selling two calls.	This Strategy is implemented when the investor requires downside protection for the short - to medium term but at lower cost.
Action	Buy 1 ITM Call, Sell 2 OTM Calls	• Short 1 Call Option, • Long 1 Put Option
Breakeven Point	Upper Breakeven Point = Strike Price of Short Calls + (Points of Maximum Profit / Number of Uncovered Calls), Lower Breakeven Point = Strike Price of Long Call +/- Net Premium Paid or Received	Purchase Price of Underlying + Net Premium Paid

RATIO CALL SPREAD Vs PROTECTIVE COLLAR - Risk & Reward

	RATIO CALL SPREAD	PROTECTIVE COLLAR
Maximum Profit Scenario	Strike Price of Short Call - Strike Price of Long Call + Net Premium Received - Commissions Paid	• Call strike - stock purchase price - net premium paid + net credit received
Maximum Loss Scenario	Price of Underlying - Strike Price of Short Calls - Max Profit + Commissions Paid	• Stock purchase price - put strike - net premium paid - put strike + net credit received
Risk	Unlimited	Limited
Reward	Limited	Limited

RATIO CALL SPREAD Vs PROTECTIVE COLLAR - Strategy Pros & Cons

	RATIO CALL SPREAD	PROTECTIVE COLLAR
Similar Strategies	Variable Ratio Write	Bull Put Spread, Bull Call Spread
Disadvantage	• Unlimited potential loss. • Complex strategy with limited profit.	• Potential profit is lower or limited.
Advantages	• Downside risk is almost zero. • Investors can book profit from share prices moving within given limits. • Trader can maximise profit when the share closes at the upper breakeven point.	The Risk is limited.