PROTECTIVE COLLAR	RATIO CALL SPREAD
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..	Ratio Call Spread Option Strategy  As the name suggests, a ratio of 2:1 is followed i.e. buy 1 ITM Call and simultaneously sell OTM Calls double the number of ITM Calls (In this case 2). This strategy is used by trader who is neutral on the market and bearish on the volatility in the near future. Here profits will be capped up to the premium amount and risk will be potentially unlimited since he is .. Read more..

PROTECTIVE COLLAR Vs RATIO CALL SPREAD - Details

	PROTECTIVE COLLAR	RATIO CALL SPREAD
Market View	Neutral	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option)
Number Of Positions	2	3
Strategy Level	Beginners	Beginners
Reward Profile	Limited	Limited
Risk Profile	Limited	Unlimited
Breakeven Point	Purchase Price of Underlying + Net Premium Paid	Upper Breakeven Point = Strike Price of Short Calls + (Points of Maximum Profit / Number of Uncovered Calls), Lower Breakeven Point = Strike Price of Long Call +/- Net Premium Paid or Received

PROTECTIVE COLLAR Vs RATIO CALL SPREAD - When & How to use ?

	PROTECTIVE COLLAR	RATIO CALL SPREAD
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 used by trader who is neutral on the market and bearish on the volatility in the near future. Here profits will be capped up to the premium amount and risk will be potentially unlimited since he is selling two calls.
Action	• Short 1 Call Option, • Long 1 Put Option	Buy 1 ITM Call, Sell 2 OTM Calls
Breakeven Point	Purchase Price of Underlying + Net Premium Paid	Upper Breakeven Point = Strike Price of Short Calls + (Points of Maximum Profit / Number of Uncovered Calls), Lower Breakeven Point = Strike Price of Long Call +/- Net Premium Paid or Received

PROTECTIVE COLLAR Vs RATIO CALL SPREAD - Risk & Reward

	PROTECTIVE COLLAR	RATIO CALL SPREAD
Maximum Profit Scenario	• Call strike - stock purchase price - net premium paid + net credit received	Strike Price of Short Call - Strike Price of Long Call + Net Premium Received - Commissions Paid
Maximum Loss Scenario	• Stock purchase price - put strike - net premium paid - put strike + net credit received	Price of Underlying - Strike Price of Short Calls - Max Profit + Commissions Paid
Risk	Limited	Unlimited
Reward	Limited	Limited

PROTECTIVE COLLAR Vs RATIO CALL SPREAD - Strategy Pros & Cons

	PROTECTIVE COLLAR	RATIO CALL SPREAD
Similar Strategies	Bull Put Spread, Bull Call Spread	Variable Ratio Write
Disadvantage	• Potential profit is lower or limited.	• Unlimited potential loss. • Complex strategy with limited profit.
Advantages	The Risk is limited.	• Downside risk is almost zero. • Investors can book profit from share prices moving within given limits. • Trader can maximise profit when the share closes at the upper breakeven point.