THE COLLAR	RATIO PUT WRITE
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..	Ratio Put Write Option Strategy  This strategy is implemented by selling (short) the underlying asset in the cash/futures market. Simultaneously, sell ATM Puts double the number of long quantity. This strategy is used by a trader who in 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. .. Read more..

THE COLLAR Vs RATIO PUT WRITE - Details

	THE COLLAR	RATIO PUT WRITE
Market View	Bullish	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option) + Underlying	PE (Put Option)
Number Of Positions	3	2
Strategy Level	Advance	Beginners
Reward Profile	Limited	Max Profit Achieved When Price of Underlying = Strike Price of Short Puts
Risk Profile	Limited	Loss Occurs When Price of Underlying < Strike Price of Short Put - Net Premium Received OR Price of Underlying > Strike Price of Short Put + Net Premium Received
Breakeven Point	Price of Features - Call Premium + Put Premium	Upper Breakeven Point = Strike Price of Short Puts + Points of Maximum Profit Lower Breakeven Point = Strike Price of Short Puts - Points of Maximum Profit

THE COLLAR Vs RATIO PUT WRITE - When & How to use ?

	THE COLLAR	RATIO PUT WRITE
Market View	Bullish	Neutral
When to use?	It should be used only in case where trader is certain about the bearish market view.	This strategy is implemented by selling (short) the underlying asset in the cash/futures market. This strategy is used by a trader who in neutral on the market and bearish on the volatility in the near future
Action	Buy Underlying, Buy 1 ATM Put Option, Sell 1 OTM Call Option	Sell 2 ATM Puts
Breakeven Point	Price of Features - Call Premium + Put Premium	Upper Breakeven Point = Strike Price of Short Puts + Points of Maximum Profit Lower Breakeven Point = Strike Price of Short Puts - Points of Maximum Profit

THE COLLAR Vs RATIO PUT WRITE - Risk & Reward

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

THE COLLAR Vs RATIO PUT WRITE - Strategy Pros & Cons

	THE COLLAR	RATIO PUT WRITE
Similar Strategies	Call Spread, Bull Put Spread	Short Strangle and Short Straddle
Disadvantage	• Limited profit. • A trader can book more profit without this strategy if the prices goes high.	• Potential loss is higher than gain. • Limited profit.
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.