Strategies

A  A  A     

Equity Collar

 

XYX is trading between $40 and $55 at expiration

If the price of XYX is anywhere between $40 and $55 at expiration, both the put and call options will be out-of-the-money and will expire worthless. The investor will keep the XYX shares, and the only cost will have been that of establishing the collar, $0.25 per share in this example. During this period, the investor will have retained ownership of the shares, with the ability to vote and to receive dividends, if either applied.

 
 

Previous Page Next Page

 

 

CBOE Volatility Index (VIX)