LONG STRADDLE	THE COLLAR
About Strategy	Long Straddle Option Strategy  Straddle is neither bullish nor bearish strategy; it is a market neutral strategy. Here a trader wishes to take advantage of the volatility in the market. This strategy involves buying of one Call option and one Put option of the same strike price, same expiry date and of the same underlying asset. Now a trader is bound to make profits once stock moves in either direc 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..

LONG STRADDLE Vs THE COLLAR - Details

	LONG STRADDLE	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	Beginners	Advance
Reward Profile	Unlimited	Limited
Risk Profile	Limited	Limited
Breakeven Point	Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call + Net Premium	Price of Features - Call Premium + Put Premium

LONG STRADDLE Vs THE COLLAR - When & How to use ?

	LONG STRADDLE	THE COLLAR
Market View	Neutral	Bullish
When to use?	This options strategy is work well when and investor market view is bearish. The strategy minimizes your risk in the event of prime movements going against your expectations.	It should be used only in case where trader is certain about the bearish market view.
Action	Buy Call Option, Buy Put Option	Buy Underlying, Buy 1 ATM Put Option, Sell 1 OTM Call Option
Breakeven Point	Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call + Net Premium	Price of Features - Call Premium + Put Premium

LONG STRADDLE Vs THE COLLAR - Risk & Reward

	LONG STRADDLE	THE COLLAR
Maximum Profit Scenario	Max profit is achieved when at one option is exercised.	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received
Maximum Loss Scenario	Maximum Loss = Net Premium Paid	Purchase Price of Underlying - Strike Price of Long Put - Net Premium Received
Risk	Limited	Limited
Reward	Unlimited	Limited

LONG STRADDLE Vs THE COLLAR - Strategy Pros & Cons

	LONG STRADDLE	THE COLLAR
Similar Strategies	Bear Put Spread	Call Spread, Bull Put Spread
Disadvantage	• There should be continuous movement of the stock and options price for this strategy to be profitable. • Time decay hurts long option if the strike price, expiration date or underlying stock are badly chosen.	• Limited profit. • A trader can book more profit without this strategy if the prices goes high.
Advantages	• Unlimited potential beyond the breakeven point in either direction . • Book your profit from highly volatile stocks without determining the direction. • Limited risk, more profit.	• 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.