Collar Calculator
Calculate potential returns for a collar strategy. Protect your stock position with a put while funding it by selling a call.
A collar combines owning stock with buying a protective put and selling a covered call. The call premium helps offset the put cost, creating a 'costless' or low-cost hedge. You limit both downside risk and upside potential.
Current price: $100.00
Max Profit
$500.00
Max Loss
$500.00
Protection Floor
$95.00
Upside Cap
$105.00
Net Premium
-$0.00(debit)
Understanding Collars
A collar is a protective options strategy that combines a covered call with a protective put. It creates a "floor" and "ceiling" for your stock position, limiting both potential losses and gains.
When to Use a Collar
- You want to protect gains on a stock position
- You're worried about a market downturn
- You want low-cost or costless protection
- You're willing to cap upside for downside protection
Key Concepts
Costless Collar
When the call premium received equals the put premium paid, creating zero net cost.
Maximum Profit
Max Profit = (Call Strike - Purchase Price) × Shares + Net PremiumMaximum Loss
Max Loss = (Purchase Price - Put Strike) × Shares - Net PremiumRelated Calculators
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