The Option Collar – the series

For those with an interest in trading options, there is one particular strategy that I use often on swing and long-term account positions – the Option Collar. I have several posts on my Blog regarding the use of this strategy, and wanted to do a new post regarding a Collar that I put on today for the Fab 5 $SXCI (SXC Health) position.

It was important for me to be aware of the need for a stop or a Collar this week as the June collar expired for this position last week. I monitored the position closely yesterday and with the strong close elected to look today for an opportunity to put on a Collar for July expiration. This is what I ultimately decided:

  • Short the July 105 Call at 2.85
  • Long the July 100 Put at 2.70

This trade was done for a credit of $.15 cents. The use of this collar allows me to just let the position run, give it a lot of chances to complete the $100 Roll process.

 

Leave a Reply

Your email address will not be published.