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 Long Put 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 Long Put 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 Long Put Vs Collar Strategy comparison:
| Comparison Aspect | Long Put | Collar Strategy |
| View |  |  |
| Strategy Introduction | Long Put is used when the trader has a bearish view on the market and expects the price of the asset to go down. He will then wait for the prices to go down and then exercise his option...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 gives the trader a right to buy the put option on expiry, but not the obligation. The trader may choose to buy the option or not. | 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 | Bearish | Moderately Bullish |
| Strategy Level Suitable for | Beginners | Experts |
| Options Traded | Put | Call, Put and Underlying |
| Number of Positions | 1 | 3 |
| Action Needed | Buy Put Option | Sell OTM Call, Buy OTM Put, Hold underlying |
| Risk for You | Limited | Limited |
| Profit Potential | Unlimited | Limited |
| Break Even Point for Investor | Strike Price MINUS Premium | Price of Features - Call Premium + Put Premium |
| Investor Intention | Let Options Expire Worthlessly | Let Options Expire Worthlessly |
| Investor Expectation | Prices of Assets Go Down | Prices of Assets Go Up |
| Strategy Summary | Effective | High Potential |
| Advantages | Unlimited Profits, Profits possible even in Bearish Market | Dividend Benefits, Limited Risk |
| Disadvantages | High Premium | Limited Profits |
| Market Scenarios - Profit | 2 | 1 |
| Market Scenarios - Loss | 1 | 1 |
| Also called as | NA | NA |
| More Comparisons | Long Put Vs Short Put | Collar Strategy Vs Short Put |
| Long Put Vs Long Combo | Collar Strategy Vs Long Combo | |
| Long Put Vs Synthetic Call | Collar Strategy Vs Synthetic Call | |
| Long Put Vs Short Call | Collar Strategy Vs Long Put | |
| Long Put Vs Long Call | Collar Strategy Vs Long Call | |
| Long Put Vs Covered Call | Collar Strategy Vs Covered Call | |
| Long Put Vs Covered Put | Collar Strategy Vs Covered Put | |
| Long Put Vs Protective Call | Collar Strategy Vs Protective Call | |
| Long Put Vs Short Box | Collar Strategy Vs Short Box | |
| Long Put Vs Long Call Condor | Collar Strategy Vs Long Call Condor | |
| Long Put Vs Short Call Condor | Collar Strategy Vs Short Call Condor | |
| Long Put Vs Box Spread | Collar Strategy Vs Box Spread | |
| Long Put Vs Short Strangle | Collar Strategy Vs Short Strangle | |
| Long Put Vs Long Strangle | Collar Strategy Vs Long Strangle | |
| Long Put Vs Collar Strategy | Collar Strategy Vs Short Call | |
| Long Put Vs Long Straddle | Collar Strategy Vs Long Straddle | |
| Long Put Vs Short Straddle | Collar Strategy Vs Short Straddle | |
| Long Put Vs Long Call Butterfly | Collar Strategy Vs Long Call Butterfly | |
| Long Put Vs Short Call Butterfly | Collar Strategy Vs Short Call Butterfly | |
| Long Put Vs Bear Call Spread | Collar Strategy Vs Bear Call Spread | |
| Long Put Vs Bear Put Spread | Collar Strategy Vs Bear Put Spread | |
| Long Put Vs Bull Call Spread | Collar Strategy Vs Bull Call Spread | |
| Long Put Vs Bull Put Spread | Collar Strategy Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Long Put Vs Collar Strategy option strategies.
As mentioned above, if you are a beginner level trader and are looking for unlimited profits with limited risk – it makes sense for you to employ the Long Put Option Strategy. 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.
At the same time, be aware of all the related aspects (like the ones listed above) and then make a choice for yourself.
Furthermore, as said 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.
