Collar Strategy
ProtectiveIntermediateStock + Options
Protect your stock holdings with a put while financing it by selling a call. Limited risk and reward.
How It Works
1
Own Stock: Start with 100 shares per contract.
2
Buy Put: Purchase downside protection below current price.
3
Sell Call: Finance the put by selling upside above current price.
Key Metrics
Max Profit:Call Strike - Stock Price - Net Debit
Max Loss:Stock Price - Put Strike + Net Debit
Upper Limit:Call Strike Price
Lower Protection:Put Strike Price
Net Cost:Put Premium - Call Premium