Recent Articles and Videos

NOTES ON Merrill Lynch (MER) Collar 1) During this viewing period, Merrill trades in an uptrend from late June 2003 at a price of about $45.00 through January 2004 with a high around $60.00. 2) This is a wide trend with some intra-month ranges as much as $5.00 and $6.00 wide, indicating a volatile trend.…click to read more.

NOTES ON Yahoo (YHOO) Collar 1) Yahoo, a historically volatile stock, bottoms out and then trades through resistance of a downtrend in mid-August 2003. 2) Yahoo then trades in an uptrend from a price around $33.00 in late August out through January 2004 with a price high of $46.00. This represents a 40% increase in…click to read more.

EBAY Chart – Collar Example #2

Saturday, October 27, 2007
Filed Under Intermediate Options Trading 

NOTES ON EBAY (EBAY) Collar 1. Ebay traded in a very wide range during July 2003. It started the month around $51.50 and traded up to $57.50 before trading down to $54.40. Within a week it traded to a high of $59.00. The week after that, the end of the month, the stock was down…click to read more.

NOTES ON ELI LILLY (LLY) Collar 1. In a one month span from Nov. 18, 2002 to Dec. 18, 2002 LLY traded from just below $60.00 to just below $70.00 and back down to $62.00. 2. In another one month span from late May 2003 to mid-June 2003, LLY traded from $56.00 up to $72.00.…click to read more.

Key Point in Collar Strategy

Thursday, October 25, 2007
Filed Under Intermediate Options Trading 

Key Point – The collar strategy allows for a limited but continued capital appreciation of a long stock position while providing for a limited, fixed downside exposure. The position is very inexpensive to initiate due to the offsetting premiums of the long (purchased) put and short (sold) call. The collar is an excellent protective strategy…click to read more.

Can The Collar Strategy Be Leaned?

Wednesday, October 24, 2007
Filed Under Intermediate Options Trading 

Like other strategies, the collar can be leaned toward the investor’s perception of the stock’s direction and strength. Let’s look at the potential leans that can be taken. Say that you have a very strong feeling the XYZ is going to go up. Instead of buying a put and selling a call with strikes that…click to read more.

Let’s take a look at how the strategy works with this position. For the sake of our illustration and to make our calculations easy let’s establish the collar using the December 27.5 put and the December 30 call, with both trading at $1.00. Remember our stock price was $28.50. The cost of the collar will…click to read more.

Finding Great Trades

Free instant access to 80 minutes of pure options trading mastery.

* Required

Copyright © 2004 - 2012 by Options University™ All Rights Reserved