PROTECTIVE COLLAR	STRIP
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..	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..

PROTECTIVE COLLAR Vs STRIP - Details

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

PROTECTIVE COLLAR Vs STRIP - When & How to use ?

	PROTECTIVE COLLAR	STRIP
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.	When a trader is bearish on the market and bullish on volatility then he will implement this strategy.
Action	• Short 1 Call Option, • Long 1 Put Option	Buy 1 ATM Call, Buy 2 ATM Puts
Breakeven Point	Purchase Price of Underlying + Net Premium Paid	Upper Breakeven Point = Strike Price of Calls/Puts + Net Premium Paid, Lower Breakeven Point = Strike Price of Calls/Puts - (Net Premium Paid/2)

PROTECTIVE COLLAR Vs STRIP - Risk & Reward

	PROTECTIVE COLLAR	STRIP
Maximum Profit Scenario	• Call strike - stock purchase price - net premium paid + net credit 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	• Stock purchase price - put strike - net premium paid - put strike + net credit received	Net Premium Paid + Commissions Paid
Risk	Limited	Limited
Reward	Limited	Unlimited

PROTECTIVE COLLAR Vs STRIP - Strategy Pros & Cons

	PROTECTIVE COLLAR	STRIP
Similar Strategies	Bull Put Spread, Bull Call Spread	Strap, Short Put Ladder
Disadvantage	• Potential profit is lower or limited.	Expensive., The share price must change significantly to generate profit., High Bid/Offer spread can have a negative influence on the position.
Advantages	The Risk is limited.	Profit is generated when the share price changes in any direction., Limited loss., The profit is potentially unlimited when share prices are moving.