When is a collar better than a put alone?

Collar reduces the cost of put protection by selling the call. Trade-off: you give up upside above the call strike. Best when: stock has had large run-up, you want protection without paying full put premium, and upside is less important.

How do I select collar strikes based on objectives?

Aggressive protection: use 95% put (near ATM), 105% call (minimal cap). Cost-focused: use 90% put, 115% call (wider spread, cheaper net cost). Balance put and call premiums to achieve target net premium.

Protective Collar Cost and Protection Calculator

Calculate protective collar premium, protection floor, upside cap, and net cost for hedging equity positions. Compare cost of protection at different strike combinations.

Principal ($)

Annual Rate (%)

Years

Compounding / Year

$ Finance Disclaimer: These calculators are for educational and illustrative purposes only. Results do not constitute financial advice. Consult a licensed financial advisor before making investment or borrowing decisions.

How to Use

Enter the values for the scenario you are assessing. Calculate protective collar premium, protection floor, upside cap, and net cost for hedging equity positions. Compare cost of protection at different strike combinations. Use the protective collar result to inform your calculation.

Related Calculators

Equity Collar

Finance Long-tail

Protective Put Breakeven

Finance Long-tail

Covered Call Breakeven

Finance Long-tail

Protective Collar Cost and Protection Calculator

How to Use

Related Calculators

Frequently Asked Questions

When is a collar better than a put alone?

How do I select collar strikes based on objectives?