PROTECTIVE COLLAR	LONG GUTS
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..	Long Guts Option Strategy  This strategy is implemented by a trader when he is neutral on the movements and bullish on volatility i.e. he expects the stock to move in either direction with high magnitude. This strategy involves buying 1 ITM Call Option and 1 ITM Put Option. This strategy can be called as Debit Spread because trader’s account is debited at the time of entering the positions.< .. Read more..

PROTECTIVE COLLAR Vs LONG GUTS - Details

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

PROTECTIVE COLLAR Vs LONG GUTS - When & How to use ?

	PROTECTIVE COLLAR	LONG GUTS
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.	This strategy is implemented by a trader when he is neutral on the movements and bullish on volatility i.e. he expects the stock to move in either direction with high magnitude.
Action	• Short 1 Call Option, • Long 1 Put Option	Buy 1 ITM Call, Buy 1 ITM Put
Breakeven Point	Purchase Price of Underlying + Net Premium Paid	Upper Breakeven Point = Net Premium Paid + Strike Price of Long Call, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid

PROTECTIVE COLLAR Vs LONG GUTS - Risk & Reward

	PROTECTIVE COLLAR	LONG GUTS
Maximum Profit Scenario	• Call strike - stock purchase price - net premium paid + net credit received	Price of Underlying - Strike Price of Long Call - Net Premium Paid OR Strike Price of Long Put - Price of Underlying - Premium Paid
Maximum Loss Scenario	• Stock purchase price - put strike - net premium paid - put strike + net credit received	Net Premium Paid + Strike Price of Long Put - Strike Price of Long Call + Commissions Paid
Risk	Limited	Limited
Reward	Limited	Unlimited

PROTECTIVE COLLAR Vs LONG GUTS - Strategy Pros & Cons

	PROTECTIVE COLLAR	LONG GUTS
Similar Strategies	Bull Put Spread, Bull Call Spread	Short Put Ladder, Strip, Strap
Disadvantage	• Potential profit is lower or limited.	• More commission involved than simply buying call or put option. • Expensive.
Advantages	The Risk is limited.	• Investors can get unlimited profit if the underlying asset goes up or down. • Ability to profit no matter if the market goes in either direction. • Limited loss.