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 Collar Strategy Vs Long Combo 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 Collar Strategy Vs Long Combo 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 Collar Strategy Vs Long Combo comparison:
| Comparison Aspect | Long Combo | Collar Strategy |
| View |  |  |
| Strategy Introduction | The long combo is used when the investor is bullish towards the market and is certain that the prices of the shares will go up...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 | The strategy expects low initial investment, however, the trader needs to pay the premium on the trades irrespective of the trade result. | 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 | Bullish | Moderately Bullish |
| Strategy Level Suitable for | Intermediates | Experts |
| Options Traded | Put, Call | Call, Put and Underlying |
| Number of Positions | 2 | 3 |
| Action Needed | Sell One OTM Put, Buy One OTM Call | Sell OTM Call, Buy OTM Put, Hold underlying |
| Risk for You | Unlimited | Limited |
| Profit Potential | Unlimited | Limited |
| Break Even Point for Investor | Call Strike + Net Premium | Price of Features - Call Premium + Put Premium |
| Investor Intention | Low Upfront Investments, High ROI | Let Options Expire Worthlessly |
| Investor Expectation | Price of Stocks Go Up | Prices of Assets Go Up |
| Strategy Summary | Complex | High Potential |
| Advantages | Low Upfront Investment, Unlimited Profits | Dividend Benefits, Limited Risk |
| Disadvantages | Unlimited Loss, High Premium | Limited Profits |
| Market Scenarios - Profit | 1 | 1 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | NA | NA |
| More Comparisons | Long Combo Vs Short Put | Collar Strategy Vs Short Put |
| Long Combo Vs Long Put | Collar Strategy Vs Long Combo | |
| Long Combo Vs Synthetic Call | Collar Strategy Vs Synthetic Call | |
| Long Combo Vs Short Call | Collar Strategy Vs Long Put | |
| Long Combo Vs Long Call | Collar Strategy Vs Long Call | |
| Long Combo Vs Covered Call | Collar Strategy Vs Covered Call | |
| Long Combo Vs Covered Put | Collar Strategy Vs Covered Put | |
| Long Combo Vs Protective Call | Collar Strategy Vs Protective Call | |
| Long Combo Vs Short Box | Collar Strategy Vs Short Box | |
| Long Combo Vs Long Call Condor | Collar Strategy Vs Long Call Condor | |
| Long Combo Vs Short Call Condor | Collar Strategy Vs Short Call Condor | |
| Long Combo Vs Box Spread | Collar Strategy Vs Box Spread | |
| Long Combo Vs Short Strangle | Collar Strategy Vs Short Strangle | |
| Long Combo Vs Long Strangle | Collar Strategy Vs Long Strangle | |
| Long Combo Vs Collar Strategy | Collar Strategy Vs Short Call | |
| Long Combo Vs Long Straddle | Collar Strategy Vs Long Straddle | |
| Long Combo Vs Short Straddle | Collar Strategy Vs Short Straddle | |
| Long Combo Vs Long Call Butterfly | Collar Strategy Vs Long Call Butterfly | |
| Long Combo Vs Short Call Butterfly | Collar Strategy Vs Short Call Butterfly | |
| Long Combo Vs Bear Call Spread | Collar Strategy Vs Bear Call Spread | |
| Long Combo Vs Bear Put Spread | Collar Strategy Vs Bear Put Spread | |
| Long Combo Vs Bull Call Spread | Collar Strategy Vs Bull Call Spread | |
| Long Combo Vs Bull Put Spread | Collar Strategy Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Collar Strategy Vs Long Combo option strategies.
If you are looking to put minimal initial investment and are open for unlimited profits as well as risks, then Long Combo options strategy can work wonders for you.
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 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.
