PROTECTIVE COLLAR	SHORT PUT BUTTERFLY
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 Butterfly Option Strategy  In Short Put Butterfly strategy, a trader is neutral in nature and expects the market to remain range bound in the near future. A trader will buy 2 ATM Put Options; sell 1 ITM & 1 OTM Put Options. Here risk and returns both are limited. Risk:< .. Read more..

PROTECTIVE COLLAR Vs SHORT PUT BUTTERFLY - Details

	PROTECTIVE COLLAR	SHORT PUT BUTTERFLY
Market View	Neutral	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option)	PE (Put Option)
Number Of Positions	2	4
Strategy Level	Beginners	Advance
Reward Profile	Limited	Limited
Risk Profile	Limited	Limited
Breakeven Point	Purchase Price of Underlying + Net Premium Paid	Upper Breakeven Point = Strike Price of Highest Strike Short Put - Net Premium Received, Lower Breakeven Point = Strike Price of Lowest Strike Short Put + Net Premium Received

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

	PROTECTIVE COLLAR	SHORT PUT BUTTERFLY
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.	In Short Put Butterfly strategy, a trader is neutral in nature and expects the market to remain range bound in the near future.
Action	• Short 1 Call Option, • Long 1 Put Option	Sell 1 ITM Put, Buy 2 ATM Put, Sell 1 OTM Put
Breakeven Point	Purchase Price of Underlying + Net Premium Paid	Upper Breakeven Point = Strike Price of Highest Strike Short Put - Net Premium Received, Lower Breakeven Point = Strike Price of Lowest Strike Short Put + Net Premium Received

PROTECTIVE COLLAR Vs SHORT PUT BUTTERFLY - Risk & Reward

	PROTECTIVE COLLAR	SHORT PUT BUTTERFLY
Maximum Profit Scenario	• Call strike - stock purchase price - net premium paid + net credit received	Net Premium Received - Commissions Paid
Maximum Loss Scenario	• Stock purchase price - put strike - net premium paid - put strike + net credit received	Strike Price of Higher Strike Short Put - Strike Price of Long Put - Net Premium Received + Commissions Paid
Risk	Limited	Limited
Reward	Limited	Limited

PROTECTIVE COLLAR Vs SHORT PUT BUTTERFLY - Strategy Pros & Cons

	PROTECTIVE COLLAR	SHORT PUT BUTTERFLY
Similar Strategies	Bull Put Spread, Bull Call Spread	Short Condor, Reverse Iron Condor
Disadvantage	• Potential profit is lower or limited.	• High risk strategy and may cause huge losses if the price of the underlying stocks falls steeply. • Higher profit is only possible when shares get close to expiration.
Advantages	The Risk is limited.	• Benefits from time decay. • Traders can earn more in a rising or range bound scenario. • Benefits from a surge in volatility.