beginners corner
Tag Archives: protective puts

The Collar Strategy from a Delta Perspective

When covered call writing is combined with protective puts the strategy is known as the collar strategy. The short call places a ceiling on gains and the long put represents a floor protecting losses. The two option positions should result in a net credit. Typically, out-of-the-money calls and puts are selected. Covered call writing and […]

52 Comments Continue Reading →
covered call writing techniques

Covered Call Writing With Protective Puts: A Proposed Strategy

When protective puts are integrated into our covered call writing strategy it is known as the collar strategy. The covered call aspect of the trade generates cash flow and the protective put leg serves as an insurance policy against catastrophic share depreciation. Recently, one of our members, Gary, shared with me a related strategy he had […]

18 Comments Continue Reading →
Covered call writing in bear and volatile markets

Emergency Management Report: Dealing with Volatile and Bearish Markets

With the stock market declining over 5% in the past month as a result of geo-political and global concerns exacerbated by the fears of an Ebola epidemic we find ourselves in a position that may lead to “panic” in our investment decisions. The stock market seemed to stabilize a bit on Friday but we are […]

17 Comments Continue Reading →

Covered Call Writing When There Is Overall Market Concern

Covered call writing is a stock option strategy with primary goals of income generation and capital preservation. Most of us are conservative investors who use the power of education to master an investment strategy better than most everyone else using the same strategy. That is what the Blue Collar Investor is all about. In the […]

19 Comments Continue Reading →
Protective puts and covered call writing

Calculating Protective Puts: The Collar Strategy

Covered call exit strategies plays a major role in mitigating losses in our BCI methodology. In most cases, we can keep losses to a minimum, turn losses into gains and enhance profits as well. Some covered call writers want the security of protecting against a catastrophic gap-down which can occur rarely. This can be accomplished […]

7 Comments Continue Reading →
Protective Puts

Protective Puts: Using The Collar Strategy During Volatile Markets

As safe a strategy as covered call writing is there is some risk; the risk is in purchasing the stock, not in selling the option. For this reason, some investors who sell covered calls also buy protective puts to alleviate some of the risk especially in volatile markets like we’ve experienced recently. Remember, the owner of […]

10 Comments Continue Reading →