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.
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.