PROTECTIVE COLLAR	SHORT STRADDLE
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 Straddle Option strategy This strategy is just the opposite of Long Straddle. A trader should adopt this strategy when he expects less volatility in the near future. Here, a trader will sell one Call Option & one Put Option of the same strike price, same expiry date and of the same underlying asset. If the stock/index hovers around the same levels then both the options will expire worthless an .. Read more..

PROTECTIVE COLLAR Vs SHORT STRADDLE - Details

	PROTECTIVE COLLAR	SHORT STRADDLE
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	Advance
Reward Profile	Limited	Limited
Risk Profile	Limited	Unlimited
Breakeven Point	Purchase Price of Underlying + Net Premium Paid	Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call+ Net Premium

PROTECTIVE COLLAR Vs SHORT STRADDLE - When & How to use ?

	PROTECTIVE COLLAR	SHORT STRADDLE
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 work well when an investor expect a flat market in the coming days with very less movement in the prices of underlying asset.
Action	• Short 1 Call Option, • Long 1 Put Option	Sell Call Option, Sell Put Option
Breakeven Point	Purchase Price of Underlying + Net Premium Paid	Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call+ Net Premium

PROTECTIVE COLLAR Vs SHORT STRADDLE - Risk & Reward

	PROTECTIVE COLLAR	SHORT STRADDLE
Maximum Profit Scenario	• Call strike - stock purchase price - net premium paid + net credit received	Max Profit = Net Premium Received - Commissions Paid
Maximum Loss Scenario	• Stock purchase price - put strike - net premium paid - put strike + net credit received	Maximum Loss = Long Call Strike Price - Short Call Strike Price - Net Premium Received
Risk	Limited	Unlimited
Reward	Limited	Limited

PROTECTIVE COLLAR Vs SHORT STRADDLE - Strategy Pros & Cons

	PROTECTIVE COLLAR	SHORT STRADDLE
Similar Strategies	Bull Put Spread, Bull Call Spread	Short Strangle
Disadvantage	• Potential profit is lower or limited.	• Unlimited risk. • If the price of the underlying asset moves in either direction then huge losses can occur.
Advantages	The Risk is limited.	• A trader can earn profit even when there is no volatility in the market . • Allows you to benefit from double time decay. • Trader can collect premium from puts and calls option .