Investopedia
investopedia.com › terms › c › collar.asp
The Collar Options Strategy Explained in Simple Terms
May 22, 2025 - The best outcome for an investor ... The collar strategy combines two methods: buying a put to protect against price drops and selling a call to earn some money upfront....
Fidelity
fidelity.com › learning-center › investment-products › options › options-strategy-guide › collar
Collar (long stock + long put + short call)
A collar position is created by buying (or owning) stock and by simultaneously buying protective puts and selling covered calls on a share-for-share basis. Usually, the call and put are out of the money.
What Is a Collar Option?
A collar is an options strategy used by traders to protect themselves against heavy losses. The strategy, also known as a hedge wrapper, involves taking a long position in an underlying stock, buying an out-of-the-money put, and selling an out-of-the-money call.
sofi.com
sofi.com › learn › content › collar-in-options
Options Collar: How the Strategy Works and Examples | SoFi
What is the maximum profit on a collar option?
The maximum profit on a collar is when the stock price rallies up to the call’s strike price. Above that level, gains are constant since the long stock position is offset by the short call.
sofi.com
sofi.com › learn › content › collar-in-options
Options Collar: How the Strategy Works and Examples | SoFi
What is maximum loss on a collar option?
The maximum loss on a collar option trade is when the stock price declines to the put’s strike price. Below that level, losses are limited since the long stock position is offset by the long put.
sofi.com
sofi.com › learn › content › collar-in-options
Options Collar: How the Strategy Works and Examples | SoFi
Videos
42:35
Protecting Unrealized Stock Profits: The Collar Strategy Explained ...
Collars Explained | Option Trading Strategies - YouTube
11:56
Protective Collars for Beginners: Options Learning Center - YouTube
24:11
Mastering the Collar Strategy: Risk Management & Big Returns with ...
04:53
The Collar Strategy - YouTube
09:45
Option Collar Strategy - YouTube
Charles Schwab
schwab.com › learn › story › what-are-options-collars
What Are Options Collars? | Charles Schwab
June 17, 2025 - In addition to a long stock position, a collar consists of two options with the same expiration: a long out-of-the-money (OTM) put and a short OTM call. The collar's long put acts as a hedge for the long stock (potentially limiting its downside losses), and the premium collected by selling the short call helps finance the cost of the long put (remember, it's possible to lose 100% of funds invested in the long position). Another way of thinking of this strategy is the combination of a covered call1 and a protective put.2
SoFi
sofi.com › learn › content › collar-in-options
Options Collar: How the Strategy Works and Examples | SoFi
November 13, 2025 - An options collar is designed to manage risk by buying a put option and selling a covered call option at the same time for the same underlying stock. Investors may use this options trading strategy when they want to potentially limit losses ...
Trading Block
tradingblock.com › strategies › collar
Collar Options Strategy: Beginner's Guide | TradingBlock
July 9, 2025 - The collar is a defensive options strategy that involves buying 100 shares of stock, selling 1 call, and buying 1 protective put.
Reddit
reddit.com › r/options › anyone like collars? (shares + cc & put)
r/options on Reddit: Anyone Like Collars? (Shares + CC & Put)
September 3, 2024 -
Collar involves buying shares, selling a covered call and buying put.
If price stays flat no loss, if price moves moderate to aggressively will profit till CC strike, if price dumps put and CC negate losses on the shares.
Curious if anyone prefers to use collars, what size account would benefit most from a strategy like this am assuming big accounts, and any feedback or thoughts from those who've ran collars?
(The more think about options, the less think about structures now and more about price action and its potential move within a predicted amount of time. This is not easy, so going long on good companies as stocks naturally rise is potentially easiest/safest way to use the leverage options provide at the cost of timing the intended move. I have earning's down now but outside of earning's, playing the short term, I haven't found anything which safe enough to consider yet aside from this initial idea of using collar.)
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Wait, are you proposing using options contracts as some sort of insurance policy, hedging against meaningful price action swings in either direction to turn profit/mitigate risk? Get out of here either that sort of craz-... Oh wait this isn't WSB. So yeah, all in all, sounds sensible to me if you wanted to insure your position and mitigate the risks of meaningful price action swings in either direction.
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i do this exclusively for any long share position. buy a 6mo+ dte long put anywhere from 50 to 60 delta for every 100 shares sell a call short dated 20 to 30 delta for income. Optional: You can add short put or put spreads if you are more bullish or ok with more shares being assigned the formula for risk in the initial married put is the price of the stock + long put cost - put strike. example with amzn: BUY 100 shares - 176.82 BUY 1 FEB 25 190 PUT - 20.40 total cost - 197.22 guaranteed exit (put strike) - 190 total at risk (total - put strike) - 7.22 or 3.66% now you have a position that can be completely risk free with only a few cycles of calls sold against the position. you can sell calls for the next 6 months and make much more than 3.6%. if price drops and you want out, you can roll the 190 put in to a closer date and receive some of the money back since closer dated will be cheaper. if it moves higher, you can roll up in price as well to continue locking in higher prices.
tastylive
tastylive.com › concepts-strategies › collar-option
What is a Collar Option Strategy & How to Use it? | tastylive
The collar options strategy is an advanced options strategy used by investors and traders to manage risk - often in concentrated stock positions. This strategy involves owning the underlying stock, buying a put option for downside protection, and selling a call option to offset the cost of the put.
Options Education
optionseducation.org › strategies › all-strategies › collar-protective-collar
Collar Protective Collar | Options Education
In return for accepting a cap on the stock's upside potential, the investor receives a minimum price where the stock can be sold during the life of the collar. For the term of the option strategy, the investor is looking for a slight rise in the stock price, but is worried about a decline.
Firstrade Securities
firstrade.com › resources › guides › options › options-strategies-collar
Options Strategies: Collar
A collar can be established by holding shares of an underlying stock, purchasing a protective put and writing a covered call on that stock. The option portions of the collar trade strategy are referred to as a combination.
Britannica
britannica.com › money › option-collar-strategy
What Is a Collar Option Strategy? Definition & Examples | Britannica Money
The collar combines the income-generation potential of a covered call and the downside protection of a put option. For educational purposes only. Encyclopædia Britannica, Inc. By setting up this strategy, you’ll “collar” your risk to ...
The Options Playbook
optionsplaybook.com › option-strategies › collar-option
Collar Options Strategy | Collar Options - The Options Playbook
A collar option is a strategy where you buy a protective put and sell a covered call with the stock price generally in between the two strike prices.
SmartAsset
smartasset.com › investing › collar-options-strategy
Collar Options Strategies: Pros, Cons and Examples
February 25, 2026 - Collar option strategies let stock owners protect against downside risk while maintaining their positions at little to no up-front cost. By combining protective puts with covered calls, you establish defined price boundaries that limit both ...
Corporate Finance Institute
corporatefinanceinstitute.com › home › resources › collar option strategy
Collar Option Strategy - Definition, Example, Explained
June 12, 2019 - A collar option strategy, also referred to as a hedge wrapper or simply collar, is an options strategy employed to reduce both positive and negative returns of an underlying asset.
Option Samurai
optionsamurai.com › all posts › simplifying the collar option strategy – [the protective collar trick in options trading]
Collar Option Strategy | Blog | Option Samurai
April 1, 2026 - A collar option strategy is an options strategy where an investor holds an underlying stock, buys an out-of-the-money put, and sells an out-of-the-money call, effectively capping both gains and losses.
Stock Investor
stockinvestor.com › investing articles › investing ideas › options trading › the collar option strategy – what is it?
The Collar Option Strategy – What Is It? | Stock Investor
May 19, 2026 - The collar option strategy involves holding shares of the underlying stock while simultaneously buying an “out-of-the-money” put option and selling an “out-of-the-money” call option.
Option Alpha
optionalpha.com › strategies › collar-strategy
Options Collar Guide [Setup, Entry, Adjustments, Exit]
The collar strategy requires owning or purchasing at least 100 shares of stock and combining the position with a covered call above the stock price and a protective put below the stock price.
InsiderFinance
insiderfinance.io › options-profit-calculator › strategy › collar
Collar Options Strategy | Visualize + Live Data | InsiderFinance
The Collar Strategy is a prudent options trading technique designed for investors seeking to protect their stock holdings from significant losses while maintaining a degree of profit potential.
Saxo
home.saxo › content › articles › options › collar-option-strategy-18102023
Collar Option Strategy | Saxo
October 27, 2023 - Summary: Collar is an option strategy used by investors and traders to reduce portfolio volatility through a combination selling and buying of options. This is done by limiting both upside and downside of an underlying asset over the short term.
Strike
strike.money › options › collar
Collar Options Strategy: Definition, How it Works, Trading Guide & Example
December 25, 2025 - A collar strategy protects against losses while allowing for some upside until the short call strike price. It entails buying protective puts and selling covered calls against a long stock position.
QuantInsti
quantinsti.com › articles › collar-options-trading-strategy-python
Collar Options Strategy: What It Is, How It Works, and Python Example
April 6, 2026 - A Collar is an Options Trading Strategy. It is a Covered Call position, with an additional Protective Put to collar the value of a security position between 2 bounds. The Collar Options Trading Strategy can be constructed by holding shares of ...