SHORT CALL	THE COLLAR
About Strategy	Short Call Option Strategy A trader shorts or writes a Call Option when he feels that underlying stock price is likely to go down. Selling Call Option is a strategy preferred for experienced traders. However this strategy is very risky in nature. If the stock rallies on the upside, your risk becomes potentially unquantifiable and unlimited. If the strategy 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..

SHORT CALL Vs THE COLLAR - Details

	SHORT CALL	THE COLLAR
Market View	Bearish	Bullish
Type (CE/PE)	CE (Call Option)	CE (Call Option) + PE (Put Option) + Underlying
Number Of Positions	1	3
Strategy Level	Advance	Advance
Reward Profile	Limited	Limited
Risk Profile	Unlimited	Limited
Breakeven Point	Strike Price of Short Call + Premium Received	Price of Features - Call Premium + Put Premium

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

	SHORT CALL	THE COLLAR
Market View	Bearish	Bullish
When to use?	It is an aggressive strategy and involves huge risks. It should be used only in case where trader is certain about the bearish market view on the underlying.	It should be used only in case where trader is certain about the bearish market view.
Action	Sell or Write Call Option	Buy Underlying, Buy 1 ATM Put Option, Sell 1 OTM Call Option
Breakeven Point	Strike Price of Short Call + Premium Received	Price of Features - Call Premium + Put Premium

SHORT CALL Vs THE COLLAR - Risk & Reward

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

SHORT CALL Vs THE COLLAR - Strategy Pros & Cons

	SHORT CALL	THE COLLAR
Similar Strategies	Covered Put, Covered Calls	Call Spread, Bull Put Spread
Disadvantage	• Unlimited risk to the upside underlying stocks. • Potential loss more than the premium collected.	• Limited profit. • A trader can book more profit without this strategy if the prices goes high.
Advantages	• With the help of this strategy, traders can book profit from falling prices in the underlying asset. • Less investment, more profit. • Traders can book profit when underlying stock price fall, move sideways or rise by a small amount.	• 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.