PROTECTIVE COLLAR	SHORT CALL 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 Call Butterfly Option Strategy This strategy is opposite of the Long Call Butterfly Strategy, a trader expects the market to remain range bound in Long Call Butterfly, but here he expects the market to move beyond strike boundaries in Short Call Butterfly. If the trader is bullish on the market’s volatility, he will implement this strategy. Here also there should be equal distance between the .. Read more..

PROTECTIVE COLLAR Vs SHORT CALL BUTTERFLY - Details

	PROTECTIVE COLLAR	SHORT CALL BUTTERFLY
Market View	Neutral	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call 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	Lower Break-even = Lower Strike Price + Net Premium, Upper Break-even = Higher Strike Price - Net Premium

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

	PROTECTIVE COLLAR	SHORT CALL 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.	This strategy is meant for special scenarios where you foresee a lot of volatility in the market due to election results, budget, policy change, annual result announcements etc.
Action	• Short 1 Call Option, • Long 1 Put Option	Buy 2 ATM Call, Sell 1 ITM Call, Sell 1 OTM Call
Breakeven Point	Purchase Price of Underlying + Net Premium Paid	Lower Break-even = Lower Strike Price + Net Premium, Upper Break-even = Higher Strike Price - Net Premium

PROTECTIVE COLLAR Vs SHORT CALL BUTTERFLY - Risk & Reward

	PROTECTIVE COLLAR	SHORT CALL BUTTERFLY
Maximum Profit Scenario	• Call strike - stock purchase price - net premium paid + net credit received	The profit is limited to the net premium received.
Maximum Loss Scenario	• Stock purchase price - put strike - net premium paid - put strike + net credit received	Higher strike price- Lower Strike Price - Net Premium
Risk	Limited	Limited
Reward	Limited	Limited

PROTECTIVE COLLAR Vs SHORT CALL BUTTERFLY - Strategy Pros & Cons

	PROTECTIVE COLLAR	SHORT CALL BUTTERFLY
Similar Strategies	Bull Put Spread, Bull Call Spread	Long Straddle, Long Call Butterfly
Disadvantage	• Potential profit is lower or limited.	• Limited rewards, usually offer smaller return. • Profitability depends on the significant movement of stocks and options prices.
Advantages	The Risk is limited.	• Even if the market is highly volatile, the risk exposure remains limited. • Without any extra investment, you can receive your premium. • Able to book profits even when the price movement cannot be predicted.