RATIO CALL SPREAD	THE COLLAR
About Strategy	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 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 Vs THE COLLAR - Details

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

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

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

RATIO CALL SPREAD Vs THE COLLAR - Risk & Reward

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

RATIO CALL SPREAD Vs THE COLLAR - Strategy Pros & Cons

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