THE COLLAR	SYNTHETIC LONG CALL
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..	Synthetic Long Call Option Strategy A trader is bullish in nature for short term, but also fearful about the downside risk associated with it. Here, a trader wants to hold an underlying asset either in physical form like in case of commodities or demat (electronic) form in case of stocks. But he is always exposed to downside risk and in order to mitigate his losses, .. Read more..

THE COLLAR Vs SYNTHETIC LONG CALL - Details

	THE COLLAR	SYNTHETIC LONG CALL
Market View	Bullish	Bullish
Type (CE/PE)	CE (Call Option) + PE (Put Option) + Underlying	CE (Call Option)
Number Of Positions	3	2
Strategy Level	Advance	Beginners
Reward Profile	Limited	When Price of Underlying > Purchase Price of Underlying + Premium Paid
Risk Profile	Limited	Limited (Maximum loss happens when the price of instrument move above from the strike price of put)
Breakeven Point	Price of Features - Call Premium + Put Premium	Underlying Price + Put Premium

THE COLLAR Vs SYNTHETIC LONG CALL - When & How to use ?

	THE COLLAR	SYNTHETIC LONG CALL
Market View	Bullish	Bullish
When to use?	It should be used only in case where trader is certain about the bearish market view.	A trader is bullish in nature for short term, but also fearful about the downside risk associated with it.
Action	Buy Underlying, Buy 1 ATM Put Option, Sell 1 OTM Call Option	Buy 1 ATM Put or OTM Put
Breakeven Point	Price of Features - Call Premium + Put Premium	Underlying Price + Put Premium

THE COLLAR Vs SYNTHETIC LONG CALL - Risk & Reward

	THE COLLAR	SYNTHETIC LONG CALL
Maximum Profit Scenario	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received	Current Price - Purchase Price - Premium Paid
Maximum Loss Scenario	Purchase Price of Underlying - Strike Price of Long Put - Net Premium Received	Premium Paid
Risk	Limited	Limited
Reward	Limited	Unlimited

THE COLLAR Vs SYNTHETIC LONG CALL - Strategy Pros & Cons

	THE COLLAR	SYNTHETIC LONG CALL
Similar Strategies	Call Spread, Bull Put Spread	Protective Put, Long Call
Disadvantage	• Limited profit. • A trader can book more profit without this strategy if the prices goes high.	•Chances of loss if the underlying goes down. •Incur losses if option is exercised.
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.	•Limited risk, unlimited profit. •Protection to your long-term holdings. • Limited loss to the to the premium paid for Put option.