PUT BACKSPREAD	PROTECTIVE COLLAR
About Strategy	Put Backspread Option Strategy If the trader is bearish on market and bullish in volatility, he will implement this strategy. However the trader can be neutral in nature i.e. indifferent if the market moves in either of the direction, this strategy will make profits, but uptrend will give a capped income than downtrend which will give unlimited returns. 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..

PUT BACKSPREAD Vs PROTECTIVE COLLAR - Details

	PUT BACKSPREAD	PROTECTIVE COLLAR
Market View	Bearish	Neutral
Type (CE/PE)	PE (Put Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	2	2
Strategy Level	Advance	Beginners
Reward Profile		Limited
Risk Profile		Limited
Breakeven Point		Purchase Price of Underlying + Net Premium Paid

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

	PUT BACKSPREAD	PROTECTIVE COLLAR
Market View	Bearish	Neutral
When to use?		This Strategy is implemented when the investor requires downside protection for the short - to medium term but at lower cost.
Action		• Short 1 Call Option, • Long 1 Put Option
Breakeven Point		Purchase Price of Underlying + Net Premium Paid

PUT BACKSPREAD Vs PROTECTIVE COLLAR - Risk & Reward

	PUT BACKSPREAD	PROTECTIVE COLLAR
Maximum Profit Scenario		• Call strike - stock purchase price - net premium paid + net credit received
Maximum Loss Scenario		• Stock purchase price - put strike - net premium paid - put strike + net credit received
Risk	Limited	Limited
Reward	Unlimited	Limited

PUT BACKSPREAD Vs PROTECTIVE COLLAR - Strategy Pros & Cons

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