PROTECTIVE COLLAR	SHORT PUT
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..	Short Put Option Strategy A trader will short put if he is bullish in nature and expects the underlying asset not to fall below a certain level. Risk: Losses will be potentially unlimited if the stock skyrockets above the strike price of put. Read more..

PROTECTIVE COLLAR Vs SHORT PUT - Details

	PROTECTIVE COLLAR	SHORT PUT
Market View	Neutral	Bullish
Type (CE/PE)	CE (Call Option) + PE (Put Option)	PE (Put Option)
Number Of Positions	2	1
Strategy Level	Beginners	Beginners
Reward Profile	Limited	Limited
Risk Profile	Limited	Unlimited
Breakeven Point	Purchase Price of Underlying + Net Premium Paid	Strike Price - Premium

PROTECTIVE COLLAR Vs SHORT PUT - When & How to use ?

	PROTECTIVE COLLAR	SHORT PUT
Market View	Neutral	Bullish
When to use?	This Strategy is implemented when the investor requires downside protection for the short - to medium term but at lower cost.	This strategy works well when you're Bullish that the price of the underlying will not fall beyond a certain level.
Action	• Short 1 Call Option, • Long 1 Put Option	Sell Put Option
Breakeven Point	Purchase Price of Underlying + Net Premium Paid	Strike Price - Premium

PROTECTIVE COLLAR Vs SHORT PUT - Risk & Reward

	PROTECTIVE COLLAR	SHORT PUT
Maximum Profit Scenario	• Call strike - stock purchase price - net premium paid + net credit received	Premium received in your account when you sell the Put Option.
Maximum Loss Scenario	• Stock purchase price - put strike - net premium paid - put strike + net credit received	Unlimited (When the price of the underlying falls.)
Risk	Limited	Unlimited
Reward	Limited	Limited

PROTECTIVE COLLAR Vs SHORT PUT - Strategy Pros & Cons

	PROTECTIVE COLLAR	SHORT PUT
Similar Strategies	Bull Put Spread, Bull Call Spread	Bull Put Spread, Short Starddle
Disadvantage	• Potential profit is lower or limited.	• Unlimited risk. • Huge losses if the price of the underlying stock falls steeply.
Advantages	The Risk is limited.	• Benefit from time decay. • Less capital required than buying the stock outright. • Profit when underlying stock price rise, move sideways or drop by a relatively small account.