SHORT STRANGLE	THE COLLAR
About Strategy	Short Strangle Option Strategy  This strategy is similar to Short Straddle; the only difference is of the strike prices at which the positions are built. Short Strangle involves selling of one OTM Call Option and selling of one OTM Put Option, of the same expiry date and same underlying asset. Here the probability of making profits is more as there is a spread between the two strike prices, and if Read more..	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..

SHORT STRANGLE Vs THE COLLAR - Details

	SHORT STRANGLE	THE COLLAR
Market View	Neutral	Bullish
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option) + PE (Put Option) + Underlying
Number Of Positions	2	3
Strategy Level	Advance	Advance
Reward Profile	Limited	Limited
Risk Profile	Unlimited	Limited
Breakeven Point	Lower Break-even = Strike Price of Put - Net Premium, Upper Break-even = Strike Price of Call+ Net Premium	Price of Features - Call Premium + Put Premium

SHORT STRANGLE Vs THE COLLAR - When & How to use ?

	SHORT STRANGLE	THE COLLAR
Market View	Neutral	Bullish
When to use?	This strategy is perfect in a neutral market scenario when the underlying is expected to be less volatile.	It should be used only in case where trader is certain about the bearish market view.
Action	Sell OTM Call, Sell OTM Put	Buy Underlying, Buy 1 ATM Put Option, Sell 1 OTM Call Option
Breakeven Point	Lower Break-even = Strike Price of Put - Net Premium, Upper Break-even = Strike Price of Call+ Net Premium	Price of Features - Call Premium + Put Premium

SHORT STRANGLE Vs THE COLLAR - Risk & Reward

	SHORT STRANGLE	THE COLLAR
Maximum Profit Scenario	Maximum Profit = Net Premium Received	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received
Maximum Loss Scenario	Loss = Price of Underlying - Strike Price of Short Call - Net Premium Received	Purchase Price of Underlying - Strike Price of Long Put - Net Premium Received
Risk	Unlimited	Limited
Reward	Limited	Limited

SHORT STRANGLE Vs THE COLLAR - Strategy Pros & Cons

	SHORT STRANGLE	THE COLLAR
Similar Strategies	Short Straddle, Long Strangle	Call Spread, Bull Put Spread
Disadvantage	• Unlimited loss is associated with this strategy, not recommended for beginners. • Limited reward amount.	• Limited profit. • A trader can book more profit without this strategy if the prices goes high.
Advantages	• Higher chance of profitability due to selling of OTM options. • Advantage from double time decay and a contraction in volatility. • Traders can book profit when underlying asset stays within a tight trading range.	• 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.