THE COLLAR	RATIO CALL SPREAD
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..	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..

THE COLLAR Vs RATIO CALL SPREAD - Details

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

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

	THE COLLAR	RATIO CALL SPREAD
Market View	Bullish	Neutral
When to use?	It should be used only in case where trader is certain about the bearish market view.	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.
Action	Buy Underlying, Buy 1 ATM Put Option, Sell 1 OTM Call Option	Buy 1 ITM Call, Sell 2 OTM Calls
Breakeven Point	Price of Features - Call Premium + Put Premium	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

THE COLLAR Vs RATIO CALL SPREAD - Risk & Reward

	THE COLLAR	RATIO CALL SPREAD
Maximum Profit Scenario	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received	Strike Price of Short Call - Strike Price of Long Call + Net Premium Received - Commissions Paid
Maximum Loss Scenario	Purchase Price of Underlying - Strike Price of Long Put - Net Premium Received	Price of Underlying - Strike Price of Short Calls - Max Profit + Commissions Paid
Risk	Limited	Unlimited
Reward	Limited	Limited

THE COLLAR Vs RATIO CALL SPREAD - Strategy Pros & Cons

	THE COLLAR	RATIO CALL SPREAD
Similar Strategies	Call Spread, Bull Put Spread	Variable Ratio Write
Disadvantage	• Limited profit. • A trader can book more profit without this strategy if the prices goes high.	• Unlimited potential loss. • Complex strategy with limited profit.
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.	• 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.