Collar Calculator
A collar is long stock plus a long protective put and a short covered call: you set a floor and cap on the position, often with low or net-zero option cost.
Stock Position
Protective Put (Buy)
Covered Call (Sell)
Enter option details to see payoff diagram
Trade Summary
Protection Floor
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Upside Cap
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Net Premium
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Commonly asked Collar questions
What is an options collar?
Long stock, long an out-of-the-money (typically) put for protection, and short an out-of-the-money call to help pay for the put—defining a loss floor and gain cap.
What is a costless collar?
When call premium roughly offsets put premium so net option debit is near zero; strikes and expirations must line up for that to happen.
When do investors use collars?
Often to lock in gains or limit drawdowns on a concentrated stock position while accepting limited upside.
Are there tax considerations?
Constructive sale and holding-period rules can matter; consult a tax professional for your situation.
How do you pick put and call strikes?
Balance how much protection you want (put strike) versus how much upside you are willing to give up (call strike), given premiums.
Collar vs covered call only?
Covered call alone does not hedge downside; adding the long put defines max loss to a zone depending on strikes and stock cost.
Related Calculators
Daily Cumulative P&L
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Avg Trade: $60.80
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Best Performing
Morning Breakouts
82% Win Rate
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