Collar Strategy

The collar strategy is an options trading strategy that can be used to limit downside risk while still allowing for some upside potential. It involves buying underlying shares, buying a put option with a lower strike price, and selling a call option with a higher strike price.

• What is the collar strategy?
• What are the benefits of using the collar strategy?
• What are the risks of using the collar strategy?

The benefits of using the collar strategy include:

• Limited downside risk
• Some upside potential

The risks of using the collar strategy include:

• The cost of the options
• The stock price may not move as expected