THE COLLAR	PROTECTIVE 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..	Protective Call Option Strategy This strategy is simply the reversal of the Synthetic Call Strategy. This strategy is implemented when a trader is bearish on the market and expects to go down. Trader will short underlying stock in the cash market and buy either an ATM Call Option or OTM Call Option. The Call Option is bought to protect / hedge the upside risk on the short position. The .. Read more..

THE COLLAR Vs PROTECTIVE CALL - Details

	THE COLLAR	PROTECTIVE CALL
Market View	Bullish	Bearish
Type (CE/PE)	CE (Call Option) + PE (Put Option) + Underlying	CE (Call Option)
Number Of Positions	3	1
Strategy Level	Advance	Beginners
Reward Profile	Limited	Unlimited
Risk Profile	Limited	Limited
Breakeven Point	Price of Features - Call Premium + Put Premium	Sale Price of Underlying + Premium Paid

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

	THE COLLAR	PROTECTIVE CALL
Market View	Bullish	Bearish
When to use?	It should be used only in case where trader is certain about the bearish market view.	This strategy is implemented when a trader is bearish on the market and expects to go down.
Action	Buy Underlying, Buy 1 ATM Put Option, Sell 1 OTM Call Option	Buy 1 ATM Call
Breakeven Point	Price of Features - Call Premium + Put Premium	Sale Price of Underlying + Premium Paid

THE COLLAR Vs PROTECTIVE CALL - Risk & Reward

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

THE COLLAR Vs PROTECTIVE CALL - Strategy Pros & Cons

	THE COLLAR	PROTECTIVE CALL
Similar Strategies	Call Spread, Bull Put Spread	Put Backspread, Long Put
Disadvantage	• Limited profit. • A trader can book more profit without this strategy if the prices goes high.	• Profitable when market moves as expected. • Not good for beginners.
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 if the market moves in opposite direction as expected. • Allows you to keep open a profitable position to make further profits. • Unlimited profit potential.