Collar

hedge Capped loss

Advanced: low/zero-cost protection by financing a put with a covered call.

⚠ A hedge/overlay on an existing position — taught with concrete strikes rather than auto-recommended from a backtest.

When to use it

Own 100 shares, buy a protective put, and sell a call to pay for it. Brackets your outcome between the two strikes — popular for protecting gains cheaply.

Max profit

Capped at the short call strike.

Max loss

Limited at the long put strike.

Payoff at expiry

illustrative shape — not to scale

■ profit zone ■ loss zone X axis = stock price at expiry →

How it's built

Strikes shown low→high. Sell = collect premium · Buy = pay premium for protection or upside.

This is a hedge / protective overlay on a stock position you already own — not a standalone win-rate signal — so it's taught here with concrete strike construction rather than backtested ticker recommendations. Open any ticker's trade cockpit and pick this strategy to see specific strikes, max loss, and max profit.