THE COLLAR	COVERED PUT
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..	Covered Put Option Strategy  This strategy is exactly opposite to Covered Call Strategy. Here the investor is neutral or moderately bearish in nature and wants to take advantage of the price fall in the near future. The trader will short one lot of stock future. Now the trader will short ATM Put Option, the option strike price will be his exit price. If the prices rally above the strike price, the .. Read more..

THE COLLAR Vs COVERED PUT - Details

	THE COLLAR	COVERED PUT
Market View	Bullish	Bearish
Type (CE/PE)	CE (Call Option) + PE (Put Option) + Underlying	PE (Put Option) + Underlying
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	Futures Price + Premium Received

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

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

THE COLLAR Vs COVERED PUT - Risk & Reward

	THE COLLAR	COVERED PUT
Maximum Profit Scenario	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received	The profit happens when the price of the underlying moves above strike price of Short Put.
Maximum Loss Scenario	Purchase Price of Underlying - Strike Price of Long Put - Net Premium Received	Price of Underlying - Sale Price of Underlying - Premium Received
Risk	Limited	Unlimited
Reward	Limited	Limited

THE COLLAR Vs COVERED PUT - Strategy Pros & Cons

	THE COLLAR	COVERED PUT
Similar Strategies	Call Spread, Bull Put Spread	Bear Put Spread, Bear Call Spread
Disadvantage	• Limited profit. • A trader can book more profit without this strategy if the prices goes high.	• Limited profit, unlimited risk. • Trader should have enough experience before using this 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.	• Investors can book profit when underlying stock price drop, move sideways or rises by a small amount. • Able to generate monthly income. • Able to generate profit from fall in prices or mild increase in the prices.