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 Synthetic Call 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 Synthetic Call 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 Synthetic Call comparison:
| Comparison Aspect | Collar Strategy | Synthetic Call |
| View |  |  |
| Strategy Introduction | 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 | Synthetic Call is an options strategy in which an underlying asset is combined with a put option to protect against depreciation in the value of the underlying asset. The overall effect is similar to...more |
| Investor Obligation | 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. | Stay with the position |
| Market Position | Moderately Bullish | Bullish |
| Strategy Level Suitable for | Experts | Beginners |
| Options Traded | Call, Put and Underlying | Put |
| Number of Positions | 3 | 2 (Underlying + Put) |
| Action Needed | Sell OTM Call, Buy OTM Put, Hold underlying | Holds a long position in an underlying asset and a put option on the same stock |
| Risk for You | Limited | Limited |
| Profit Potential | Limited | Unlimited |
| Break Even Point for Investor | Price of Features - Call Premium + Put Premium | Underlying Price + Put Premium |
| Investor Intention | Let Options Expire Worthlessly | Save Transaction Costs, Stay Protected from downward market movement. |
| Investor Expectation | Prices of Assets Go Up | Prices of the Assets to Go Up |
| Strategy Summary | High Potential | Profitable |
| Advantages | Dividend Benefits, Limited Risk | Dividends on Stocks, Limited Risk, Unlimited Profit |
| Disadvantages | Limited Profits | Chances of loss if the underlying goes down |
| Market Scenarios - Profit | 1 | 1 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | NA | NA |
| More Comparisons | Collar Strategy Vs Short Put | Synthetic Call Vs Short Put |
| Collar Strategy Vs Long Combo | Synthetic Call Vs Long Combo | |
| Collar Strategy Vs Synthetic Call | Synthetic Call Vs Short Call | |
| Collar Strategy Vs Long Put | Synthetic Call Vs Long Put | |
| Collar Strategy Vs Long Call | Synthetic Call Vs Long Call | |
| Collar Strategy Vs Covered Call | Synthetic Call Vs Covered Call | |
| Collar Strategy Vs Covered Put | Synthetic Call Vs Covered Put | |
| Collar Strategy Vs Protective Call | Synthetic Call Vs Protective Call | |
| Collar Strategy Vs Short Box | Synthetic Call Vs Short Box | |
| Collar Strategy Vs Long Call Condor | Synthetic Call Vs Long Call Condor | |
| Collar Strategy Vs Short Call Condor | Synthetic Call Vs Short Call Condor | |
| Collar Strategy Vs Box Spread | Synthetic Call Vs Box Spread | |
| Collar Strategy Vs Short Strangle | Synthetic Call Vs Short Strangle | |
| Collar Strategy Vs Long Strangle | Synthetic Call Vs Long Strangle | |
| Collar Strategy Vs Short Call | Synthetic Call Vs Collar Strategy | |
| Collar Strategy Vs Long Straddle | Synthetic Call Vs Long Straddle | |
| Collar Strategy Vs Short Straddle | Synthetic Call Vs Short Straddle | |
| Collar Strategy Vs Long Call Butterfly | Synthetic Call Vs Long Call Butterfly | |
| Collar Strategy Vs Short Call Butterfly | Synthetic Call Vs Short Call Butterfly | |
| Collar Strategy Vs Bear Call Spread | Synthetic Call Vs Bear Call Spread | |
| Collar Strategy Vs Bear Put Spread | Synthetic Call Vs Bear Put Spread | |
| Collar Strategy Vs Bull Call Spread | Synthetic Call Vs Bull Call Spread | |
| Collar Strategy Vs Bull Put Spread | Synthetic Call Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Collar Strategy Vs Synthetic Call 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.
If you are looking at a bearish market momentum and are open towards a limited risk with a potential of unlimited profits, then Synthetic Call options strategy is definitely a positive go for you.
Be aware of all the related aspects (like the ones listed above) and then make a choice for yourself.
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.
