PROTECTIVE COLLAR	LONG 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..	Long Put Butterfly Option Strategy  The Long Put Butterfly is a neutral strategy where a trader will be bearish on the volatility i.e. he thinks the market will have sideways kind of movement and will not rally sharply in either direction in the near future. This strategy involves sale of 2 ATM Put Options, buy 1 ITM and 1 OTM Put Option. The risk and reward are limited. Read more..

PROTECTIVE COLLAR Vs LONG PUT BUTTERFLY - Details

	PROTECTIVE COLLAR	LONG 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 Long Put - Net Premium Paid, Lower Breakeven Point = Strike Price of Lowest Strike Long Put + Net Premium Paid

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

	PROTECTIVE COLLAR	LONG 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.	The Long Put Butterfly is a neutral strategy where a trader will be bearish on the volatility i.e. he thinks the market will have sideways kind of movement and will not rally sharply in either direction in the near future.
Action	• Short 1 Call Option, • Long 1 Put Option	Buy 1 OTM Put, Sell 2 ATM Puts, Buy 1 ITM Put
Breakeven Point	Purchase Price of Underlying + Net Premium Paid	Upper Breakeven Point = Strike Price of Highest Strike Long Put - Net Premium Paid, Lower Breakeven Point = Strike Price of Lowest Strike Long Put + Net Premium Paid

PROTECTIVE COLLAR Vs LONG PUT BUTTERFLY - Risk & Reward

	PROTECTIVE COLLAR	LONG PUT BUTTERFLY
Maximum Profit Scenario	• Call strike - stock purchase price - net premium paid + net credit received	Strike Price of Higher Strike Long Put - Strike Price of Short Put - Net Premium Paid - Commissions Paid
Maximum Loss Scenario	• Stock purchase price - put strike - net premium paid - put strike + net credit received	When Price of Underlying <= Strike Price of Lower Strike Long Put OR Price of Underlying >= Strike Price of Higher Strike Long Put
Risk	Limited	Limited
Reward	Limited	Limited

PROTECTIVE COLLAR Vs LONG PUT BUTTERFLY - Strategy Pros & Cons

	PROTECTIVE COLLAR	LONG PUT BUTTERFLY
Similar Strategies	Bull Put Spread, Bull Call Spread	Iron Condors, Iron Butterfly
Disadvantage	• Potential profit is lower or limited.	• Risk is higher than reward. • When the underlying price is in between the two breakeven points, time decay hurts the position.
Advantages	The Risk is limited.	• Limited maximum loss. • Unlimited profit potential, risk only limited to loss of premium. • Benefits from low volatility.