Collar and zero-cost collar terms used in option-based downside protection and yield enhancement.
This subsection groups related instrument terms so the generated section list reads by contract type, payoff behavior, or market function rather than legacy archive order.
In this section
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Collar Options Strategy: Meaning and Example
Learn what a collar options strategy is and how investors use a long put and short call to limit downside and upside around a stock position.
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Zero Cost Collar: Strategy Overview and Benefits
A Zero Cost Collar is an options trading strategy that can offer downside protection at the expense of limited upside potential. By simultaneously purchasing a put option and selling a call option, investors can mitigate their outlay and potentially make the strategy cost-neutral.