Collar
Outlook: Bullish
Hedging and income
Long 100 shares + long put below + short call above. Caps both sides; near-zero net cost possible.
Max profit
(Short call strike - share basis) - net option cost.
Max loss
(Share basis - put strike) + net option cost.
Breakeven
Share basis + net option cost.
Legs
Long
1×
stock
Long
1×
put
ATM −10
Short
1×
call
ATM +20
Structure
Long 100 shares + long 1 OTM put + short 1 OTM call, same expiration.
When to use
Protecting a concentrated long position over a defined window. Often used by long-term holders during quarterly volatility.
Example
Long 100 SPY @ $450 + long 90 DTE 440 put $8 + short 90 DTE 470 call $7. Net cost $1. Max profit $1,900, max loss $1,100.
Notes
- Zero-cost variants exist but usually require giving up upside aggressively.
Continue in the app
Build it in the simulator
Open this structure in the app, adjust spot, IV, and DTE, and watch the payoff and Greeks move.
Related strategies
Covered Call
Long 100 shares + short 1 call above the price. Income trade against held shares.
Protective Put
Long 100 shares + long 1 put. Floor under the position; payoff identical to a long call.
The Wheel
Cycle: cash-secured put → assignment → covered call → assignment → repeat. Systematic income.