RISK REVERSAL	PROTECTIVE COLLAR
About Strategy	Risk Reversal Option Strategy This strategy protects an investor from unfavourable price movements in the position but limits the profits can be made on that position. A risk reversal is a hedging strategy that protects a long or short position by using put and call options. In this one option is buying and other is written. In this strategy the trader has to pay a premium, while the written option prod 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..

RISK REVERSAL Vs PROTECTIVE COLLAR - Details

	RISK REVERSAL	PROTECTIVE COLLAR
Market View	Bullish	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	2	2
Strategy Level	Advance	Beginners
Reward Profile	Unlimited	Limited
Risk Profile	Unlimited	Limited
Breakeven Point	Premium received - Put Strike Price	Purchase Price of Underlying + Net Premium Paid

RISK REVERSAL Vs PROTECTIVE COLLAR - When & How to use ?

	RISK REVERSAL	PROTECTIVE COLLAR
Market View	Bullish	Neutral
When to use?	This strategy can be used for hedging. When an investor want to protect long or short position by using a call and put option.	This Strategy is implemented when the investor requires downside protection for the short - to medium term but at lower cost.
Action	This strategy work when an investor want to hedge their position by buying a put option and selling a call option.	• Short 1 Call Option, • Long 1 Put Option
Breakeven Point	Premium received - Put Strike Price	Purchase Price of Underlying + Net Premium Paid

RISK REVERSAL Vs PROTECTIVE COLLAR - Risk & Reward

	RISK REVERSAL	PROTECTIVE COLLAR
Maximum Profit Scenario	You have unlimited profit potential to the upside.	• Call strike - stock purchase price - net premium paid + net credit received
Maximum Loss Scenario	You have nearly unlimited downside risk as well because you are short the put	• Stock purchase price - put strike - net premium paid - put strike + net credit received
Risk	Unlimited	Limited
Reward	Unlimited	Limited

RISK REVERSAL Vs PROTECTIVE COLLAR - Strategy Pros & Cons

	RISK REVERSAL	PROTECTIVE COLLAR
Similar Strategies	-	Bull Put Spread, Bull Call Spread
Disadvantage	Unlimited Risk.	• Potential profit is lower or limited.
Advantages	Unlimited profit.	The Risk is limited.