PROTECTIVE COLLAR	CALL BACKSPREAD
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..	Call Backspread Option Trading  This strategy is adopted by traders who are bullish in nature. He expects market and volatility to rise in the near future. A trader need not be direction specific here (i.e. an upward or downward trend, but a small bias towards an uptrend should always be present, as the gains will be much higher once the market moves up r .. Read more..

PROTECTIVE COLLAR Vs CALL BACKSPREAD - Details

	PROTECTIVE COLLAR	CALL BACKSPREAD
Market View	Neutral	Bullish
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option)
Number Of Positions	2	3
Strategy Level	Beginners	Advance
Reward Profile	Limited	Unlimited
Risk Profile	Limited	Limited
Breakeven Point	Purchase Price of Underlying + Net Premium Paid	Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss

PROTECTIVE COLLAR Vs CALL BACKSPREAD - When & How to use ?

	PROTECTIVE COLLAR	CALL BACKSPREAD
Market View	Neutral	Bullish
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 when the investor expects the price of the stock to rise in the future.
Action	• Short 1 Call Option, • Long 1 Put Option	Sell 1 ITM Call, BUY 2 OTM Call
Breakeven Point	Purchase Price of Underlying + Net Premium Paid	Lower breakeven = strike price of the short call, Upper breakeven = strike price of long calls + point of maximum loss

PROTECTIVE COLLAR Vs CALL BACKSPREAD - Risk & Reward

	PROTECTIVE COLLAR	CALL BACKSPREAD
Maximum Profit Scenario	• Call strike - stock purchase price - net premium paid + net credit received	Unlimited profit potential if the stock goes in upward direction.
Maximum Loss Scenario	• Stock purchase price - put strike - net premium paid - put strike + net credit received	Strike Price of long call - Strike Price of short call - Net premium received
Risk	Limited	Limited
Reward	Limited	Unlimited

PROTECTIVE COLLAR Vs CALL BACKSPREAD - Strategy Pros & Cons

	PROTECTIVE COLLAR	CALL BACKSPREAD
Similar Strategies	Bull Put Spread, Bull Call Spread	-
Disadvantage	• Potential profit is lower or limited.
Advantages	The Risk is limited.	• Unlimited profit potential.