When it comes to Options Trading, there are different complexities involved in terms of choosing a specific strategy that works the best for you.
At the same time, each strategy has its own set of advantages as well as limitations, thus making the concept of options trading even more challenging. Thus, in case you are looking to fit a particular strategy in your option trades, just check few areas before you make a choice.
In this detailed comparison of Bear Put Spread Vs Collar Strategy options trading strategies, we will be looking at the below-mentioned aspects and more:
- Current Market Position
- Your Risk Appetite
- Your Trading Experience
- Profit Potential
- Intention and Expectation of a trader
- Break-even point of your trade
Apart from the Bear Put Spread Vs Collar Strategy strategies, there are more than 25 comparisons of each of these strategies with other option strategies. With all these comparisons, you should be able to filter the ones that work the best for you.
Here is the detailed Bear Put Spread Vs Collar Strategy comparison:
| Comparison Aspect | Bear Put Spread | Collar Strategy |
| View |  |  |
| Strategy Introduction | Bear Put Spread is a type of vertical spread wherein buys a put option hoping to make a profit due to the market decline, and at the same time writes another put option with...more | The collar strategy is used when the trader is mildly bullish towards the market. He expects the prices to go up, but at the same time, he wants to limit his risks if the prices go down. It is ideally not used by the...more |
| Investor Obligation | If the prices fall as expected, the trader can make profits and limit his losses, but if the prices fall far more than expected then the trader won’t be able to make any profit. | The trader is able to benefit from the price rise by holding the underlying security and receives ownership benefits like dividends. At the same time, the risks are limited with the use of protective put. |
| Market Position | Moderately Bearish | Moderately Bullish |
| Strategy Level Suitable for | Intermediates | Experts |
| Options Traded | Put | Call, Put and Underlying |
| Number of Positions | 2 | 3 |
| Action Needed | Buy ITM Put, Sell OTM Put | Sell OTM Call, Buy OTM Put, Hold underlying |
| Risk for You | Limited | Limited |
| Profit Potential | Limited | Limited |
| Break Even Point for Investor | Strike Price of Long Put MINUS Net Premium | Price of Features - Call Premium + Put Premium |
| Investor Intention | Let Put Options Expire Worthlessly | Let Options Expire Worthlessly |
| Investor Expectation | Market Prices to go Down | Prices of Assets Go Up |
| Strategy Summary | Limit Your Losses | High Potential |
| Advantages | Limited Risk, Capped Losses | Dividend Benefits, Limited Risk |
| Disadvantages | Limited Profit | Limited Profits |
| Market Scenarios - Profit | 1 | 1 |
| Market Scenarios - Loss | 2 | 1 |
| Also called as | NA | NA |
| More Comparisons | Bear Put Spread Vs Short Put | Collar Strategy Vs Short Put |
| Bear Put Spread Vs Long Combo | Collar Strategy Vs Long Combo | |
| Bear Put Spread Vs Synthetic Call | Collar Strategy Vs Synthetic Call | |
| Bear Put Spread Vs Long Put | Collar Strategy Vs Long Put | |
| Bear Put Spread Vs Long Call | Collar Strategy Vs Long Call | |
| Bear Put Spread Vs Covered Call | Collar Strategy Vs Covered Call | |
| Bear Put Spread Vs Covered Put | Collar Strategy Vs Covered Put | |
| Bear Put Spread Vs Protective Call | Collar Strategy Vs Protective Call | |
| Bear Put Spread Vs Short Box | Collar Strategy Vs Short Box | |
| Bear Put Spread Vs Long Call Condor | Collar Strategy Vs Long Call Condor | |
| Bear Put Spread Vs Short Call Condor | Collar Strategy Vs Short Call Condor | |
| Bear Put Spread Vs Box Spread | Collar Strategy Vs Box Spread | |
| Bear Put Spread Vs Short Strangle | Collar Strategy Vs Short Strangle | |
| Bear Put Spread Vs Long Strangle | Collar Strategy Vs Long Strangle | |
| Bear Put Spread Vs Collar Strategy | Collar Strategy Vs Short Call | |
| Bear Put Spread Vs Long Straddle | Collar Strategy Vs Long Straddle | |
| Bear Put Spread Vs Short Straddle | Collar Strategy Vs Short Straddle | |
| Bear Put Spread Vs Long Call Butterfly | Collar Strategy Vs Long Call Butterfly | |
| Bear Put Spread Vs Short Call Butterfly | Collar Strategy Vs Short Call Butterfly | |
| Bear Put Spread Vs Bear Call Spread | Collar Strategy Vs Bear Call Spread | |
| Bear Put Spread Vs Short Call | Collar Strategy Vs Bear Put Spread | |
| Bear Put Spread Vs Bull Call Spread | Collar Strategy Vs Bull Call Spread | |
| Bear Put Spread Vs Bull Put Spread | Collar Strategy Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Bear Put Spread Vs Collar Strategy option strategies.
At the same time, if you are in a moderately Bullish Market situation and are looking for consistent but limited profits for your share market trades, then you can opt to go for the Collar Strategy. There is a limited scope of risk involved in this strategy too.
This needs to be known that the profit you get using this strategy is also limited in scope.
At the same time, if you are looking to make some money from a market decline and can take some basic risk – then Bear Put Spread options strategy makes sense to you.
This needs to be known that the profit you get using both of these strategies is also limited in scope.
Furthermore, as told above, it also depends on the market situation.
In case you are looking to trade in options segment or share market in general, let us assist you in that. Just fill the form below and we will take you to the steps ahead.
