SYNTHETIC LONG CALL	PROTECTIVE COLLAR
About Strategy	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..	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..

SYNTHETIC LONG CALL Vs PROTECTIVE COLLAR - Details

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

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

	SYNTHETIC LONG CALL	PROTECTIVE COLLAR
Market View	Bullish	Neutral
When to use?	A trader is bullish in nature for short term, but also fearful about the downside risk associated with it.	This Strategy is implemented when the investor requires downside protection for the short - to medium term but at lower cost.
Action	Buy 1 ATM Put or OTM Put	• Short 1 Call Option, • Long 1 Put Option
Breakeven Point	Underlying Price + Put Premium	Purchase Price of Underlying + Net Premium Paid

SYNTHETIC LONG CALL Vs PROTECTIVE COLLAR - Risk & Reward

	SYNTHETIC LONG CALL	PROTECTIVE COLLAR
Maximum Profit Scenario	Current Price - Purchase Price - Premium Paid	• Call strike - stock purchase price - net premium paid + net credit received
Maximum Loss Scenario	Premium Paid	• Stock purchase price - put strike - net premium paid - put strike + net credit received
Risk	Limited	Limited
Reward	Unlimited	Limited

SYNTHETIC LONG CALL Vs PROTECTIVE COLLAR - Strategy Pros & Cons

	SYNTHETIC LONG CALL	PROTECTIVE COLLAR
Similar Strategies	Protective Put, Long Call	Bull Put Spread, Bull Call Spread
Disadvantage	•Chances of loss if the underlying goes down. •Incur losses if option is exercised.	• Potential profit is lower or limited.
Advantages	•Limited risk, unlimited profit. •Protection to your long-term holdings. • Limited loss to the to the premium paid for Put option.	The Risk is limited.