THE COLLAR	STRIP
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..	Strip Option Strategy Strip Strategy is the opposite of Strap Strategy. When a trader is bearish on the market and bullish on volatility then he will implement this strategy by buying two ATM Put Options & one ATM Call Option, of the same strike price, expiry date & underlying asset. If the prices move downwards then this strategy will make more profits compared to short straddle because of the .. Read more..

THE COLLAR Vs STRIP - Details

	THE COLLAR	STRIP
Market View	Bullish	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option) + Underlying	CE (Call Option) + PE (Put Option)
Number Of Positions	3	3
Strategy Level	Advance	Beginners
Reward Profile	Limited	Unlimited
Risk Profile	Limited	Limited
Breakeven Point	Price of Features - Call Premium + Put Premium	Upper Breakeven Point = Strike Price of Calls/Puts + Net Premium Paid, Lower Breakeven Point = Strike Price of Calls/Puts - (Net Premium Paid/2)

THE COLLAR Vs STRIP - When & How to use ?

	THE COLLAR	STRIP
Market View	Bullish	Neutral
When to use?	It should be used only in case where trader is certain about the bearish market view.	When a trader is bearish on the market and bullish on volatility then he will implement this strategy.
Action	Buy Underlying, Buy 1 ATM Put Option, Sell 1 OTM Call Option	Buy 1 ATM Call, Buy 2 ATM Puts
Breakeven Point	Price of Features - Call Premium + Put Premium	Upper Breakeven Point = Strike Price of Calls/Puts + Net Premium Paid, Lower Breakeven Point = Strike Price of Calls/Puts - (Net Premium Paid/2)

THE COLLAR Vs STRIP - Risk & Reward

	THE COLLAR	STRIP
Maximum Profit Scenario	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received	Price of Underlying - Strike Price of Calls - Net Premium Paid OR 2 x (Strike Price of Puts - Price of Underlying) - Net Premium Paid
Maximum Loss Scenario	Purchase Price of Underlying - Strike Price of Long Put - Net Premium Received	Net Premium Paid + Commissions Paid
Risk	Limited	Limited
Reward	Limited	Unlimited

THE COLLAR Vs STRIP - Strategy Pros & Cons

	THE COLLAR	STRIP
Similar Strategies	Call Spread, Bull Put Spread	Strap, Short Put Ladder
Disadvantage	• Limited profit. • A trader can book more profit without this strategy if the prices goes high.	Expensive., The share price must change significantly to generate profit., High Bid/Offer spread can have a negative influence on the position.
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.	Profit is generated when the share price changes in any direction., Limited loss., The profit is potentially unlimited when share prices are moving.