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How investors are using collar strategies on some of the most-traded stocks
Options 10 minutes to read
Koen Hoorelbeke
Investment and Options Strategist
Protect your stocks with collars, a practical guide to five popular names
You’ve worked hard to build your investments, and watched them grow. But when markets start to wobble, a common worry kicks in: how do I protect those gains without walking away from future upside?
This is where options come in. One of the simplest ways to reduce downside risk on shares you already own is a collar strategy - a defined-risk approach that uses two options:
- a put, which acts like insurance, and
- a call, which helps offset the cost, but may cap your gains.
If that sounds like a trade-off you’re willing to explore, this article is for you.
This guide builds on our earlier explainer:
How to protect your stocks with options when markets get shaky.
Here, we make it real - with simple, real-world examples on some of the most-traded names.
Before we begin: Each collar strategy assumes you already own 100 shares of the stock. Selling a call without owning the shares can expose you to unlimited risk, this guide focuses only on covered approaches.
Five real-world inspirational collar examples
Important note: The strategies and examples provided in this article are purely for educational purposes. They are intended to assist in shaping your thought process and should not be replicated or implemented without careful consideration. Every investor or trader must conduct their own due diligence and take into account their unique financial situation, risk tolerance, and investment objectives before making any decisions. Remember, investing in the stock market carries risk, and it's crucial to make informed decisions.Legend
Structure: put strike / call strike, net premium
→ Example: “220/275, debit $1.20” means buy a 220 put and sell a 275 call, for a net cost of $1.20 per share (or $120 per 100-share lot).
floor (put strike) = the protection level below which your stock losses are offset.
cap (call strike) = the level above which gains are capped because you’ve sold a call.
cost = the net option premium (+ credit = income; – debit = cost).
| Ticker | Expiry: 2025‑12‑19 | Expiry: 2026‑03‑20 | Context |
|---|---|---|---|
| AMZN | Balanced: 220/275, debit $1.20 Protective: 230/255, credit $0.85 | Balanced: 220/275, credit $0.30 Protective: 230/255, credit $3.70 | Spot ~243.04 43 DTE / 134 DTE |
| GOOGL | Balanced: 255/320, debit $0.25 Protective: 270/300, credit $0.70 | Balanced: 255/320, credit $2.45 Protective: 270/300, credit $3.95 | Spot ~284.75 43 DTE / 134 DTE |
| MSFT | Balanced: 445/560, debit $0.94 Protective: 465/525, credit $1.25 | Balanced: 445/560, credit $0.75 Protective: 465/525, credit $6.25 | Spot ~497.10 43 DTE / 134 DTE |
| NVDA | Balanced: 169/212, debit $0.50 Protective: 177/200, credit $0.50 | Balanced: 170/210, credit $1.55 Protective: 175/200, credit $3.25 | Spot ~188.08 43 DTE / 134 DTE |
| TSLA | Balanced: 400/500, credit $2.80 Protective: 420/470, credit $4.65 | Balanced: 400/500, credit $9.40 Protective: 420/470, credit $10.70 | Spot ~445.91 43 DTE / 134 DTE |
Note: These examples are for educational purposes only and should not be considered recommendations.
How to read this grid
- Balanced – A middle-ground setup: the put sits about 8–12% below today’s price, the call about 10–15% above. It balances cost and protection.
- Protective – The put strike is closer to current price (tighter safety net), while the call is lower (caps gains sooner). Offers stronger downside cover, usually at a small cost.
- Premium line (“debit” or “credit”) – Shows whether the collar costs money (debit) or brings in income (credit). Multiply by 100 for the dollar impact per contract.
- Context column – Gives current stock price (Spot) and days until expiry (DTE) so you can see timing and relative distance.
What can happen with a collar
- Price goes up: You may hit the cap. Some investors roll their call higher to reopen upside.
- Price goes sideways: The collar may expire with little impact. Many simply reset for the next period.
- Price drops: The put helps cushion the fall. You stay invested, but with a safety buffer.
Quick reminders
- Each collar covers 100 shares. Adjust accordingly.
- The cost shown is per share. Multiply by 100 to get total outlay (before fees or taxes).
Why these setups?
We’ve filtered for two common setups:
- Protective: puts 4–8% below, calls 3–8% above
- Balanced: puts 8–12% below, calls 10–15% above
These aren’t perfect — just starting points to help you frame your own thinking.
This content is marketing material and should not be regarded as investment advice. Trading financial instruments carries risks and historic performance is not a guarantee of future results.
The Author is permitted to wait at least 24 hours from the time of the publication before they trade the instruments themselves.
The instrument(s) referenced in this content may be issued by a partner, from whom Saxo receives promotional fees, payment or retrocessions. While Saxo may receive compensation from these partnerships, all content is created with the aim of providing clients with valuable information and options.
This content will not be changed or subject to review after publication.
The Author is permitted to wait at least 24 hours from the time of the publication before they trade the instruments themselves.
The instrument(s) referenced in this content may be issued by a partner, from whom Saxo receives promotional fees, payment or retrocessions. While Saxo may receive compensation from these partnerships, all content is created with the aim of providing clients with valuable information and options.
This content will not be changed or subject to review after publication.
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