PROTECTIVE COLLAR	LONG 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..	Long Put Option Strategy This strategy is implemented by buying 1 Put Option i.e. a single position, when the person is bearish on the market and expects the market to move downwards in the near future. Risk: The maximum loss will be the premium amount paid.< .. Read more..

PROTECTIVE COLLAR Vs LONG PUT - Details

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

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

	PROTECTIVE COLLAR	LONG PUT
Market View	Neutral	Bearish
When to use?	This Strategy is implemented when the investor requires downside protection for the short - to medium term but at lower cost.	A long put option strategy works well when you're expecting the underlying asset to sharply decline or be volatile in near future.
Action	• Short 1 Call Option, • Long 1 Put Option	Buy Put Option
Breakeven Point	Purchase Price of Underlying + Net Premium Paid	Strike Price of Long Put - Premium Paid

PROTECTIVE COLLAR Vs LONG PUT - Risk & Reward

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

PROTECTIVE COLLAR Vs LONG PUT - Strategy Pros & Cons

	PROTECTIVE COLLAR	LONG PUT
Similar Strategies	Bull Put Spread, Bull Call Spread	Protective Call, Short Put
Disadvantage	• Potential profit is lower or limited.	• 100% loss if strike price, expiration dates or underlying stocks are badly chosen. • Time decay.
Advantages	The Risk is limited.	• Limited risk to the premium paid. • Less capital investment and more profit. • Unlimited profit potential with limited risk.