PROTECTIVE CALL	THE COLLAR
About Strategy	Protective Call Option Strategy This strategy is simply the reversal of the Synthetic Call Strategy. This strategy is implemented when a trader is bearish on the market and expects to go down. Trader will short underlying stock in the cash market and buy either an ATM Call Option or OTM Call Option. The Call Option is bought to protect / hedge the upside risk on the short position. The Read more..	The Collar Option Strategy Collar Strategy is an extension to Covered Call Strategy. A trader, who is bullish in nature but has a very low risk appetite and wants to mitigate his risk will implement the Collar Strategy. Collar involves buying of stock in either Cash/Futures Market, buying an ATM Put Option & selling an OTM Call Option. The expiry dates of the op .. Read more..

PROTECTIVE CALL Vs THE COLLAR - Details

	PROTECTIVE CALL	THE COLLAR
Market View	Bearish	Bullish
Type (CE/PE)	CE (Call Option)	CE (Call Option) + PE (Put Option) + Underlying
Number Of Positions	1	3
Strategy Level	Beginners	Advance
Reward Profile	Unlimited	Limited
Risk Profile	Limited	Limited
Breakeven Point	Sale Price of Underlying + Premium Paid	Price of Features - Call Premium + Put Premium

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

	PROTECTIVE CALL	THE COLLAR
Market View	Bearish	Bullish
When to use?	This strategy is implemented when a trader is bearish on the market and expects to go down.	It should be used only in case where trader is certain about the bearish market view.
Action	Buy 1 ATM Call	Buy Underlying, Buy 1 ATM Put Option, Sell 1 OTM Call Option
Breakeven Point	Sale Price of Underlying + Premium Paid	Price of Features - Call Premium + Put Premium

PROTECTIVE CALL Vs THE COLLAR - Risk & Reward

	PROTECTIVE CALL	THE COLLAR
Maximum Profit Scenario	Sale Price of Underlying - Price of Underlying - Premium Paid	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received
Maximum Loss Scenario	Premium Paid + Call Strike Price - Sale Price of Underlying + Commissions Paid	Purchase Price of Underlying - Strike Price of Long Put - Net Premium Received
Risk	Limited	Limited
Reward	Unlimited	Limited

PROTECTIVE CALL Vs THE COLLAR - Strategy Pros & Cons

	PROTECTIVE CALL	THE COLLAR
Similar Strategies	Put Backspread, Long Put	Call Spread, Bull Put Spread
Disadvantage	• Profitable when market moves as expected. • Not good for beginners.	• Limited profit. • A trader can book more profit without this strategy if the prices goes high.
Advantages	• Limited risk if the market moves in opposite direction as expected. • Allows you to keep open a profitable position to make further profits. • Unlimited profit potential.	• This strategy protects the losses on underlying asset. • Risk gets limited if the price of the stocks goes down. • Trader can get ownership benefits life dividend and voting rights.