LONG STRANGLE	PROTECTIVE COLLAR
About Strategy	Long Strangle Option Strategy A Strangle is similar to Straddle. In Strangle, a trader will purchase one OTM Call Option and one OTM Put Option, of the same expiry date and the same underlying asset. This strategy will reduce the entry cost for trader and it is also cheaper than straddle. A trader will make profits, if the market moves sharply in either direction and gives extra-ordinary returns in the Read more..	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 STRANGLE Vs PROTECTIVE COLLAR - Details

	LONG STRANGLE	PROTECTIVE COLLAR
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	Unlimited	Limited
Risk Profile	Limited	Limited
Breakeven Point	Lower Breakeven Point = Strike Price of Put - Net Premium, Upper Breakeven Point = Strike Price of Call + Net Premium	Purchase Price of Underlying + Net Premium Paid

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

	LONG STRANGLE	PROTECTIVE COLLAR
Market View	Neutral	Neutral
When to use?	This strategy is used in special scenarios where you foresee a lot of volatility in the market due to election results, budget, policy change, annual result announcements etc.	This Strategy is implemented when the investor requires downside protection for the short - to medium term but at lower cost.
Action	Buy OTM Call Option, Buy OTM Put Option	• Short 1 Call Option, • Long 1 Put Option
Breakeven Point	Lower Breakeven Point = Strike Price of Put - Net Premium, Upper Breakeven Point = Strike Price of Call + Net Premium	Purchase Price of Underlying + Net Premium Paid

LONG STRANGLE Vs PROTECTIVE COLLAR - Risk & Reward

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

LONG STRANGLE Vs PROTECTIVE COLLAR - Strategy Pros & Cons

	LONG STRANGLE	PROTECTIVE COLLAR
Similar Strategies	Long Straddle, Short Strangle	Bull Put Spread, Bull Call Spread
Disadvantage	• Require significant price movement to book profit. • Traders can lose more money if the underlying asset stayed stagnant.	• Potential profit is lower or limited.
Advantages	• Able to book profit, no matter if the underlying asset goes in either direction. • Limited loss to the debit paid. • If the underlying asset continues to move in one direction then you can book Unlimited profit .	The Risk is limited.