How a Collar can help starring Cirrus Logic

I have owned $CRUS for a while now and the use of Options has helped offset the decline in price (too much reliance on $AAPL). I have owned the May 20 Put and on the post-earnings reaction I had one simple thing to do: sell an upside Call against my stock.

I chose to sell the May 20 Call – collecting $.80 in premium – to complete the Collar. Now today the stock is pulling back so a review of the Option premium movement from the Collar shows just how important owning a Collar can be:

  • The May 20 Call is now at a .25/.30 bid/ask — down from the 1.05 close yesterday
  • The May 20 Put is now at a 2.00/2.15 bid/ask — up from the 1.14 close yesterday
  • The stock is down $1.40 from the close yesterday

As price has pulled back today, both side of the Collar begin to win which helps to more than offset the decline in share price.

2 thoughts on “How a Collar can help starring Cirrus Logic

  1. Pingback: Best Of The StockTwits Network 4-27-13 | The bclund BlogThe bclund Blog

  2. Update: the May 20 Call closed at $.19 & the May 20 Put closed at $2.20 to end the week.

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