PROTECTIVE COLLAR	SHORT GUTS
About Strategy	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..	Short Guts Option Strategy  This strategy is implemented by a trader when he is neutral on the movements and bearish on volatility i.e. he expects the stock to be range bound in the near future. This strategy involves sale of 1 ITM Call Option and 1 ITM Put Option. This strategy can be called as Credit Spread since his account is credited at the time of entering in the positions. < .. Read more..

PROTECTIVE COLLAR Vs SHORT GUTS - Details

	PROTECTIVE COLLAR	SHORT GUTS
Market View	Neutral	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	2	2
Strategy Level	Beginners	Beginners
Reward Profile	Limited	Limited
Risk Profile	Limited	Unlimited
Breakeven Point	Purchase Price of Underlying + Net Premium Paid	Upper Breakeven Point = Net Premium Received + Strike Price of Short Call, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received

PROTECTIVE COLLAR Vs SHORT GUTS - When & How to use ?

	PROTECTIVE COLLAR	SHORT GUTS
Market View	Neutral	Neutral
When to use?	This Strategy is implemented when the investor requires downside protection for the short - to medium term but at lower cost.	This strategy is implemented by a trader when he is neutral on the movements and bearish on volatility i.e. he expects the stock to be range bound in the near future.
Action	• Short 1 Call Option, • Long 1 Put Option	Sell 1 ITM Call, Sell 1 ITM Put
Breakeven Point	Purchase Price of Underlying + Net Premium Paid	Upper Breakeven Point = Net Premium Received + Strike Price of Short Call, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received

PROTECTIVE COLLAR Vs SHORT GUTS - Risk & Reward

	PROTECTIVE COLLAR	SHORT GUTS
Maximum Profit Scenario	• Call strike - stock purchase price - net premium paid + net credit received	Net Premium Received + Strike Price of Short Put - Strike Price of Short Call - Commissions Paid
Maximum Loss Scenario	• Stock purchase price - put strike - net premium paid - put strike + net credit received	Price of Underlying - Strike Price of Short Call - Net Premium Received OR Strike Price of Short Put - Price of Underlying - Net Premium Received + Commissions Paid
Risk	Limited	Unlimited
Reward	Limited	Limited

PROTECTIVE COLLAR Vs SHORT GUTS - Strategy Pros & Cons

	PROTECTIVE COLLAR	SHORT GUTS
Similar Strategies	Bull Put Spread, Bull Call Spread	Short Strangle (Sell Strangle), Short Straddle (Sell Straddle)
Disadvantage	• Potential profit is lower or limited.	• Unlimited potential loss if the underlying stock continues to move in one direction. • High margin required.
Advantages	The Risk is limited.	• Ability to profit even when underlying asset stays stagnant. • You are already paid your full profit the moment the position is put on as this is a credit spread position. • Higher chance of ending in full profit as compared to short strangle or short straddle.