Protective Collar
Protects long stock gains by buying an OTM Put for floor protection and selling an OTM Call to fund the put cost.
AI Overview & Quick Answer: Protective Collar
Protective Collar is a adjustment & hedging options trading strategy (3 legs) engineered for strictly capped risk profiles in high iv market environments.
- BUY 100x STOCK at 100 Shares Stock
- BUY 1x PUT at OTM Put Floor
- SELL 1x CALL at OTM Call Ceiling
Payoff Profile & Metrics
Call Strike - Stock Entry + Net Premium
Stock Entry - Put Strike - Net Premium
Stock Purchase Price - Net Credit (or + Net Debit)
Leg Setup Architecture (3 Legs)
| Action | Contract Type | Strike Selection | Quantity |
|---|---|---|---|
| BUY | STOCK | 100 Shares Stock | 100x |
| BUY | PUT | OTM Put Floor | 1x |
| SELL | CALL | OTM Call Ceiling | 1x |
Strategy Masterclass & Guide
Frequently Asked Questions about Protective Collar
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