SHORT CALL	PROTECTIVE 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..	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..

SHORT CALL Vs PROTECTIVE COLLAR - Details

	SHORT CALL	PROTECTIVE COLLAR
Market View	Bearish	Neutral
Type (CE/PE)	CE (Call Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	1	2
Strategy Level	Advance	Beginners
Reward Profile	Limited	Limited
Risk Profile	Unlimited	Limited
Breakeven Point	Strike Price of Short Call + Premium Received	Purchase Price of Underlying + Net Premium Paid

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

	SHORT CALL	PROTECTIVE COLLAR
Market View	Bearish	Neutral
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.	This Strategy is implemented when the investor requires downside protection for the short - to medium term but at lower cost.
Action	Sell or Write Call Option	• Short 1 Call Option, • Long 1 Put Option
Breakeven Point	Strike Price of Short Call + Premium Received	Purchase Price of Underlying + Net Premium Paid

SHORT CALL Vs PROTECTIVE COLLAR - Risk & Reward

	SHORT CALL	PROTECTIVE COLLAR
Maximum Profit Scenario	Max Profit = Premium Received	• Call strike - stock purchase price - net premium paid + net credit received
Maximum Loss Scenario	Loss Occurs When Price of Underlying > Strike Price of Short Call + Premium Received	• Stock purchase price - put strike - net premium paid - put strike + net credit received
Risk	Unlimited	Limited
Reward	Limited	Limited

SHORT CALL Vs PROTECTIVE COLLAR - Strategy Pros & Cons

	SHORT CALL	PROTECTIVE COLLAR
Similar Strategies	Covered Put, Covered Calls	Bull Put Spread, Bull Call Spread
Disadvantage	• Unlimited risk to the upside underlying stocks. • Potential loss more than the premium collected.	• Potential profit is lower or limited.
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.	The Risk is limited.