PUT BACKSPREAD	THE COLLAR
About Strategy	Put Backspread Option Strategy If the trader is bearish on market and bullish in volatility, he will implement this strategy. However the trader can be neutral in nature i.e. indifferent if the market moves in either of the direction, this strategy will make profits, but uptrend will give a capped income than downtrend which will give unlimited returns. 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..

PUT BACKSPREAD Vs THE COLLAR - Details

	PUT BACKSPREAD	THE COLLAR
Market View	Bearish	Bullish
Type (CE/PE)	PE (Put Option)	CE (Call Option) + PE (Put Option) + Underlying
Number Of Positions	2	3
Strategy Level	Advance	Advance
Reward Profile		Limited
Risk Profile		Limited
Breakeven Point		Price of Features - Call Premium + Put Premium

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

	PUT BACKSPREAD	THE COLLAR
Market View	Bearish	Bullish
When to use?		It should be used only in case where trader is certain about the bearish market view.
Action		Buy Underlying, Buy 1 ATM Put Option, Sell 1 OTM Call Option
Breakeven Point		Price of Features - Call Premium + Put Premium

PUT BACKSPREAD Vs THE COLLAR - Risk & Reward

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

PUT BACKSPREAD Vs THE COLLAR - Strategy Pros & Cons

	PUT BACKSPREAD	THE COLLAR
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.