Collar (Protective Collar)
Computes the outcome of a collar: holding a stock, buying a put as a protective floor and selling a call as a ceiling, using the call premium to fund the put. It's the cheap way to protect a gain without closing the position — in exchange, you give up the upside above the ceiling. The tool returns the net option cost, the maximum profit, the maximum loss and the breakeven. Enter the stock price, the put and call strikes and the two premiums.
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Collar (Protective Collar)
Computes the outcome of a collar: holding a stock, buying a put as a protective floor and selling a call as a ceiling, using the call premium to fund the put. It's the cheap way to protect a gain without closing the position — in exchange, you give up the upside above the ceiling. The tool returns the net option cost, the maximum profit, the maximum loss and the breakeven. Enter the stock price, the put and call strikes and the two premiums.
Protecting a gain almost for free
Imagine your stock has risen a lot and you want to lock in the gain without selling, maybe for tax reasons, maybe because you still believe in it. The collar handles this. You buy a put, which acts as a protective floor, and fund much or all of that cost by selling a call, which becomes a ceiling. The result is a band your outcome gets boxed into.
The price of peace of mind is giving up the upside above the ceiling. If the stock takes off, you don't follow past the sold call's strike. In return, if it tanks, the put catches the fall at the floor. When the call premium received exactly covers the put's, you get the famous zero-cost collar, protection with no net outlay.
Enter the stock price, the put and call strikes and the two premiums. The tool returns the net option cost, the maximum profit at the ceiling, the maximum loss at the floor and the breakeven. For a standard protective collar, pick the put below and the call above the current stock price.
Related Tools
Protective Put
Computes the outcome of a protective put: holding a stock and buying a put as insurance against a fall. The put sets a floor on the loss but costs the premium, which raises the breakeven. It's the most direct insurance for a long position: the upside stays unlimited, the downside is capped. The tool returns the maximum loss and the breakeven. Enter the stock price, the put strike and the premium paid.
Long Call Butterfly Spread
Computes the outcome of a long call butterfly: buy one low-strike call, sell two middle-strike calls and buy one high-strike call, with equally spaced strikes. It's a bet that the asset will sit near the middle strike at expiry. The tool returns the net cost (debit), the maximum profit, the maximum loss (capped at the debit) and the two breakeven points. Enter the three strikes and the three call premiums.
Bull Put Spread
Computes the outcome of a bull put spread: selling a higher-strike put and buying a lower-strike put, collecting a credit. It's a bullish (or neutral) bet that pockets the premium with risk capped by the bought put. The tool returns the credit received (maximum profit), the maximum loss and the breakeven. Enter the two strikes and the respective put premiums.
Bear Put Spread
Computes the outcome of a bear put spread: buying a higher-strike put and selling a lower-strike put, paying a debit. It's a bearish bet with limited risk and cost — cheaper than buying the put alone, in exchange for a capped profit. The tool returns the cost (debit), the maximum profit, the maximum loss and the breakeven. Enter the two strikes and the respective put premiums.
Calendar Spread
Computes the net debit of a calendar spread, also called a horizontal spread: selling a short-dated option and buying a longer-dated one at the same strike. The strategy exploits the fact that the short option loses value to time (theta) faster than the longer one. The result is the cost of setting up the position. Enter the premium of the short option sold and that of the long option bought.
Long Call Condor
Computes the outcome of a long call condor: buy one low-strike call, sell two middle-strike calls and buy one high-strike call. It's a cousin of the butterfly with a wider profit zone: you bet the asset will stay within a range rather than land exactly on a point. The tool returns the net cost, the maximum profit, the maximum loss and the two breakeven points. Enter the four strikes and the four call premiums.
The results provided by this tool are for general informational and educational purposes only and do not constitute professional, financial, medical, legal, tax or accounting advice. Always confirm important decisions with a qualified professional and official sources.