I have written about using an Option Collar on several occasions here and here – and thought I would provide some additional thoughts on the Collar trades that I have on in January.

I currently have the following long positions on with an options Collar:

1) CREE with a FEB 26/28 collar in the swing account

2) DECK with a FEB 80/85 collar in the swing account

3) SBUX with a FEB 45/50 collar in the long term account

The positions for #1 & #2 where dip buys that bounced nicely and I really wanted to hold the positions for a swing timeframe – with a collar I am able to do that more easily.

With the long-term position in SBUX, I wanted to hold through earnings and didn’t mind the cap at the 50 strike – but certainly wanted the downside protection if any issue arose from the earnings release.

Updated Section

CREE is currently trading at 25.36 but the collar trades at 1.45/.25 for the 26/28 put/call for February 18 expiration which would leave a net of 1.20 if executed right now. Just a follow up to what has transpired since putting on the collar last week.


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