STRAP	THE COLLAR
About Strategy	Strap Option Strategy  Strap Strategy is similar to Long Straddle, the only difference is the quantity traded. A trader will buy two Call Options and one Put Options. In this strategy, a trader is very bullish on the market and volatility on upside but wants to hedge himself in case the stock doesn’t perform as per his expectations. This strategy will make more profits compared to long straddle sin 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..

STRAP Vs THE COLLAR - Details

	STRAP	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	3	3
Strategy Level	Beginners	Advance
Reward Profile	Profit Achieved When Price of Underlying > Strike Price of Calls/Puts + (Net Premium Paid/2) OR Price of Underlying < Strike Price of Calls/Puts - Net Premium Paid	Limited
Risk Profile	Max Loss Occurs When Price of Underlying = Strike Price of Calls/Puts	Limited
Breakeven Point	Strike Price of Calls/Puts + (Net Premium Paid/2)	Price of Features - Call Premium + Put Premium

STRAP Vs THE COLLAR - When & How to use ?

	STRAP	THE COLLAR
Market View	Neutral	Bullish
When to use?	This strategy is used when the investor is bullish on the stock and expects volatility in the near future.	It should be used only in case where trader is certain about the bearish market view.
Action	Buy 2 ATM Call Option, Buy 1 ATM Put Option	Buy Underlying, Buy 1 ATM Put Option, Sell 1 OTM Call Option
Breakeven Point	Strike Price of Calls/Puts + (Net Premium Paid/2)	Price of Features - Call Premium + Put Premium

STRAP Vs THE COLLAR - Risk & Reward

	STRAP	THE COLLAR
Maximum Profit Scenario	UNLIMITED	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received
Maximum Loss Scenario	Net Premium Paid	Purchase Price of Underlying - Strike Price of Long Put - Net Premium Received
Risk	Limited	Limited
Reward	Unlimited	Limited

STRAP Vs THE COLLAR - Strategy Pros & Cons

	STRAP	THE COLLAR
Similar Strategies	Strip, Short Put Ladder, Short Call Ladder	Call Spread, Bull Put Spread
Disadvantage	• To generate profit, there should be significant change in share price. • Expensive strategy.	• Limited profit. • A trader can book more profit without this strategy if the prices goes high.
Advantages	• Limited loss. • If share prices are moving then traders can book unlimited profit. • A trader can still book profit if the underlying falls substantially.	• 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.