PROTECTIVE COLLAR	RATIO PUT SPREAD
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..	Ratio Put Spread Option Strategy  This strategy involves buying ITM Puts and simultaneously selling OTM Puts, double the number of ITM Puts. This strategy is used by a trader who is neutral on the market and bearish on the volatility in the near future. Here profits will be capped up to the premium amount and risk will be potentially unlimited. Read more..

PROTECTIVE COLLAR Vs RATIO PUT SPREAD - Details

	PROTECTIVE COLLAR	RATIO PUT SPREAD
Market View	Neutral	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option)	PE (Put Option)
Number Of Positions	2	3
Strategy Level	Beginners	Beginners
Reward Profile	Limited	Limited
Risk Profile	Limited	Unlimited
Breakeven Point	Purchase Price of Underlying + Net Premium Paid	Upper Breakeven Point = Strike Price of Long Put +/- Net Premium Received or Paid, Lower Breakeven Point = Strike Price of Short Puts - (Points of Maximum Profit / Number of Uncovered Puts)

PROTECTIVE COLLAR Vs RATIO PUT SPREAD - When & How to use ?

	PROTECTIVE COLLAR	RATIO PUT SPREAD
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 used by a trader who is neutral on the market and bearish on the volatility in the near future.
Action	• Short 1 Call Option, • Long 1 Put Option	Buy 1 ITM Put, Sell 2 OTM Puts
Breakeven Point	Purchase Price of Underlying + Net Premium Paid	Upper Breakeven Point = Strike Price of Long Put +/- Net Premium Received or Paid, Lower Breakeven Point = Strike Price of Short Puts - (Points of Maximum Profit / Number of Uncovered Puts)

PROTECTIVE COLLAR Vs RATIO PUT SPREAD - Risk & Reward

	PROTECTIVE COLLAR	RATIO PUT SPREAD
Maximum Profit Scenario	• Call strike - stock purchase price - net premium paid + net credit received	Strike Price of Long Put - Strike Price of Short Put + Net Premium Received - Commissions Paid
Maximum Loss Scenario	• Stock purchase price - put strike - net premium paid - put strike + net credit received	Strike Price of Short - Price of Underlying - Max Profit + Commissions Paid
Risk	Limited	Unlimited
Reward	Limited	Limited

PROTECTIVE COLLAR Vs RATIO PUT SPREAD - Strategy Pros & Cons

	PROTECTIVE COLLAR	RATIO PUT SPREAD
Similar Strategies	Bull Put Spread, Bull Call Spread	Short Straddle (Sell Straddle), Short Strangle (Sell Strangle)
Disadvantage	• Potential profit is lower or limited.	• Unlimited potential risk. • Limited profit.
Advantages	The Risk is limited.	• Directional strategy so that there is either no upside or downside risk. • Able to profit even if trader is neutral on the market. • Higher probability of profit.