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Covered Call Collar

 Profile Version / Simplified Version / Comprehensive Version

Print Covered Call Collar Printable Version

Covered Call Collar Risk Graph
Learn How To Read This Chart

Covered Call Collar - Components
Write (sell to open) 1 contract of nearest out of the money call option for every 100 shares you own and then buy to open 1 Out of the Money (OTM) Put option for every 100 shares you own.

Sell OTM Call + Buy Stock + Buy OTM Put



Covered Call Collar - Expectation

Up or Stagnant



Covered Call Collar - Risk / Reward

Maximum Profit: Limited

Maximum Loss: Limited



Covered Call Collar - Breakeven Point

Stagnant Breakeven point = (Bid ask spread of short call option + Purchase price of OTM put option) / theta

Lower Breakeven point = (Initial Value of Short Call Options - Purchase price of long OTM put option) - Initial Value of underlying stock



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