Collar

Collar
1. A protective options strategy that is implemented after a long position in a stock has experienced substantial gains. It is created by purchasing an out of the money put option while simultaneously writing an out of the money call option.

Also known as "hedge wrapper".

2. A general restriction on market activities.

1. The purchase of an out-of-the money put option is what protects the underlying shares from a large downward move and locks in the profit. The price paid to buy the puts is lowered by amount of premium that is collect by selling the out of the money call. The ultimate goal of this position is that the underlying stock continues to rise until the written strike is reached.

2. An example is a circuit breaker which is meant to prevent extreme losses (or gains) once an index reaches a certain level.

Collars can protect you against massive losses, but they also prevent massive gains.


Investment dictionary. . 2012.

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  • Collar — may refer to: Human neckwear: Collar (clothing), the part of a garment that fastens around or frames the neck Ruff collar Slave collar Collar (BDSM), a device of any material placed around the neck of the submissive partner in BDSM Collar… …   Wikipedia

  • Collar — Col lar, n. [OE. coler, coller, OF. colier, F. collier, necklace, collar, fr. OF. col neck, F. cou, fr. L. collum; akin to AS. heals, G. & Goth. hals. Cf. {Hals}, n.] 1. Something worn round the neck, whether for use, ornament, restraint, or… …   The Collaborative International Dictionary of English

  • collar — Col lar, n. [OE. coler, coller, OF. colier, F. collier, necklace, collar, fr. OF. col neck, F. cou, fr. L. collum; akin to AS. heals, G. & Goth. hals. Cf. {Hals}, n.] 1. Something worn round the neck, whether for use, ornament, restraint, or… …   The Collaborative International Dictionary of English

  • collar — index handcuff Burton s Legal Thesaurus. William C. Burton. 2006 collar …   Law dictionary

  • Collar — Col lar, v. t. [imp. & p. p. {Collared}; p. pr. & vb. n. {Collaring}.] 1. To seize by the collar. [1913 Webster] 2. To put a collar on. 3. to arrest, as a wanted criminal. Same as {put the collar on}. [PJC] {To collar beef} (or other meat), to… …   The Collaborative International Dictionary of English

  • Collar — (abgeleitet vom lateinischen collare Halseisen für Sklaven ) bezeichnet: im Finanzwesen eine Kombination aus zwei gegenläufigen Optionen, siehe Collar (Finanzwesen) in der Mykologie einen Teil eines Pilzes, siehe Collar (Mykologie) im BDSM ein… …   Deutsch Wikipedia

  • collar — sustantivo masculino 1. Adorno o joya que rodea el cuello sin ceñirlo: un collar de perlas. 2. Especie de cinturón pequeño que rodea el cuello de ciertos animales domésticos: Puso un collar antiparasitario al gato. 3. Insignia de ciertas… …   Diccionario Salamanca de la Lengua Española

  • collar — [käl′ər] n. [ME coler < OFr colier < L collare, band or chain for the neck < collum, the neck < IE base * kwel , to turn > WHEEL, Ger hals, neck] 1. the part of a garment that encircles the neck 2. a cloth band or folded over piece …   English World dictionary

  • collar of S's — or collar of SS or collar of esses, an ornamental collar comprising a number of S s, sometimes combined with other figures, long in use in England, having been worn as a badge by adherents of the royal house of Lancaster, and still forming a part …   Useful english dictionary

  • collar — [n] neck attire bertha, choker, dicky, Eton, fichu, fraise, frill, jabot, neckband, ruff, torque, Vandyke; concepts 450,452 collar [v] apprehend abduct, appropriate, arrest, bag, capture, catch, cop*, corner, get, grab, hook, lay hands on, nab,… …   New thesaurus

  • collar — (Del lat. collāre, de collum, cuello). 1. m. Adorno que ciñe o rodea el cuello. 2. Insignia de algunas magistraturas, dignidades y órdenes de caballería. 3. Faja de plumas que ciertas aves tienen alrededor del cuello, y que se distingue por su… …   Diccionario de la lengua española

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