Protects long stock gains by buying an OTM Put for floor protection and selling an OTM Call to fund the put cost.
Protective Collar is a adjustment & hedging options trading strategy (3 legs) engineered for strictly capped risk profiles in high iv market environments.
Call Strike - Stock Entry + Net Premium
Stock Entry - Put Strike - Net Premium
Stock Purchase Price - Net Credit (or + Net Debit)
| Action | Contract Type | Strike Selection | Quantity |
|---|---|---|---|
| BUY | STOCK | 100 Shares Stock | 100x |
| BUY | PUT | OTM Put Floor | 1x |
| SELL | CALL | OTM Call Ceiling | 1x |
The fundamental defensive adjustment: closing an existing option leg and reopening a new option leg at a different strike or expiration.
🔐 Adjustment & HedgingCombines futures contracts with option spreads to insulate institutional commodity/index portfolios from overnight shocks.
🔐 Adjustment & HedgingCreates a synthetic inverse position (e.g. Synthetic Short) to temporarily freeze portfolio delta without selling underlying stocks.
Join FrontClubs today on the web feed or Android app. Receive $100,000 in virtual funds, join top trader clubs, and test your trading strategies risk-free.
