THE COLLAR	CALL BACKSPREAD
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..	Call Backspread Option Trading  This strategy is adopted by traders who are bullish in nature. He expects market and volatility to rise in the near future. A trader need not be direction specific here (i.e. an upward or downward trend, but a small bias towards an uptrend should always be present, as the gains will be much higher once the market moves up r .. Read more..

THE COLLAR Vs CALL BACKSPREAD - Details

	THE COLLAR	CALL BACKSPREAD
Market View	Bullish	Bullish
Type (CE/PE)	CE (Call Option) + PE (Put Option) + Underlying	CE (Call Option)
Number Of Positions	3	3
Strategy Level	Advance	Advance
Reward Profile	Limited	Unlimited
Risk Profile	Limited	Limited
Breakeven Point	Price of Features - Call Premium + Put Premium	Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss

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

	THE COLLAR	CALL BACKSPREAD
Market View	Bullish	Bullish
When to use?	It should be used only in case where trader is certain about the bearish market view.	This strategy is used when the investor expects the price of the stock to rise in the future.
Action	Buy Underlying, Buy 1 ATM Put Option, Sell 1 OTM Call Option	Sell 1 ITM Call, BUY 2 OTM Call
Breakeven Point	Price of Features - Call Premium + Put Premium	Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss

THE COLLAR Vs CALL BACKSPREAD - Risk & Reward

	THE COLLAR	CALL BACKSPREAD
Maximum Profit Scenario	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received	Unlimited profit potential if the stock goes in upward direction.
Maximum Loss Scenario	Purchase Price of Underlying - Strike Price of Long Put - Net Premium Received	Strike Price of long call - Strike Price of short call - Net premium received
Risk	Limited	Limited
Reward	Limited	Unlimited

THE COLLAR Vs CALL BACKSPREAD - Strategy Pros & Cons

	THE COLLAR	CALL BACKSPREAD
Similar Strategies	Call Spread, Bull Put Spread	-
Disadvantage	• Limited profit. • A trader can book more profit without this strategy if the prices goes high.
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.	• Unlimited profit potential.