The collar strategy is a covered call writing-like strategy where a protective put is added to the covered call trade. Typically, an OTM call represents a ceiling to the trade (maximum gain) and an OTM put represents a floor (maximum loss). In this article, Invesco QQQ Trust (Nasdaq: QQQ), a technology exchange-traded fund (ETF) will be analyzed to explain how the collar strategy can be implemented.
Graphic representation of a collar trade
What is QQQ?
This is an ETF consisting of the top 100 non-financial corporations listed on the Nasdaq exchange. It includes companies like NVDA, AAPL, MSFT and AMZN.
Option chain data for QQQ on 12/8/2025
- QQQ trading at $623.90
- The $626.00 1/9/2026 call strike showed a bid price of $13.27 (ceiling)
- The $618.00 1/9/2026 put strike showed an ask price of $10.75 (floor)
- The goal is to have a net option credit, which is the case using these 2 strikes
Covered call calculations without the protective put using the BCI Trade Management Calculator (TMC)
- Red circle: 33-day trade through expiration
- Brown cells: Initial return: 2.13%, 23.53% annualized
- Purple cell: 0.34% additional upside potential (if QQQ moves up to, or beyond the $626.00 strike)
Covered call calculations with the protective put using net option credit ($13.27 – $10.75 = $2.52
- Red circle: 33-day trade through expiration
- Brown cells: Initial return: 0.40%, 4.47% annualized (without upside potential)
- Purple cell: 0.34% additional upside potential
- The annualized return with upside potential is 8.2%
Discussion
Technology collar trades can be implemented by using QQQ and net option credits. The advantage is that we are eliminating catastrophic losses by including the protective puts. The disadvantage is that we are generating lower initial time-value returns, but with the same upside potential. To generate a higher collar return, a lower OTM call or OTM put strike will accomplish that goal.
Selling Cash-Secured Puts Basic and Advanced Principles
video course with downloadable workbook
This course contains 6- parts:
Section I: Option basics (definitions and foundational information)
Section II: Traditional put-selling (stock & option selection + position management)
Section III: PCP (wheel) strategy (adding covered calls to selling cash-secured puts)
Section IV: Buy a stock at a discount instead of a limit order (buy a stock at our target price or get paid not to buy the stock)
Section V: Ultra-low-risk put/Delta strategy (High probability, low-risk trades)
Section VI: Ultra-low-risk put/implied volatility strategy (High probability, low-risk trades)
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Over the years, the BCI community has been incredibly gracious by sending our BCI team email testimonials sharing stories as to what our educational content has meant to their families. Moving forward, we have decided to publish several of these testimonials in our blog articles. We will never use a last name unless given permission:
1. Sarasota Investment Group
Portfolio Overwriting: A Form of Covered Call Writing
Wednesday April 22, 2026
Details to follow.
2. BCI Educational Webinar #10: The Put-Call-Put (PCP) or “Wheel Strategy”
Thursday May 14, 2026, at 8 PM ET
Using both covered call writing & cash-secured puts in a multi-tiered option selling strategy. A 68-day real-life example taken from one of Alan’s portfolios will be analyzed.
BONUS: Barry will share a real-life credit spread trade using our BCI Conservative Credit Spread Management System.
Discount coupons and a live Q&A session will follow the presentation.
Click here for more information and to register (scroll down).
3. American Association of Individual Investors: NYC Chapter
June 10, 2026, at 6 PM – 8 PM ET
More information to come.
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July 20 – 22, 2026
Caesars Palace Hotel
Las Vegas
Details to follow.
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September 24 – 25, 2026
MaRS Center, Toronto Canada
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October 5 – 7, 2026
Hilton Orlando Lake Buena Vista
Details to follow.
