PROTECTIVE COLLAR	BEAR 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..	Bear Put Spread Option Strategy  When a trader is moderately bearish on the market he can implement this strategy. Bear-Put-Spread involves buying of ITM Put Option and selling of an OTM Put Option. If prices fall, the ITM Put option starts making profits and the OTM Put option also adds to profit at a certain extent if the expiry price stays above the OTM strike. However, if it falls below the OTM .. Read more..

PROTECTIVE COLLAR Vs BEAR PUT SPREAD - Details

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

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

	PROTECTIVE COLLAR	BEAR PUT SPREAD
Market View	Neutral	Bearish
When to use?	This Strategy is implemented when the investor requires downside protection for the short - to medium term but at lower cost.	The bear call spread options strategy is used when you are bearish in market view. The strategy minimizes your risk in the event of prime movements going against your expectations.
Action	• Short 1 Call Option, • Long 1 Put Option	Buy ITM Put Option, Sell OTM Put Option
Breakeven Point	Purchase Price of Underlying + Net Premium Paid	Strike Price of Long Put - Net Premium

PROTECTIVE COLLAR Vs BEAR PUT SPREAD - Risk & Reward

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

PROTECTIVE COLLAR Vs BEAR PUT SPREAD - Strategy Pros & Cons

	PROTECTIVE COLLAR	BEAR PUT SPREAD
Similar Strategies	Bull Put Spread, Bull Call Spread	Bear Call Spread, Bull Call Spread
Disadvantage	• Potential profit is lower or limited.	• Limited profit. • Early assignment risk.
Advantages	The Risk is limited.	• If the strike price, expiration date or underlying stocks are rightly chosen then risk of losses would be limited to the net premium paid. • This strategy works well in declining markets. • Limited risk.