Collar Strategy

Options + Equity Intermediate RELIANCE TCS HDFC Bank Infosys ITC All Stock Options with underlying holdings

Neutral to Moderately Bullish with Protection Need

Backtest Collar Strategy on real market data — free

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Quick Reference

Strategy Type	Protection - Bounded Stock/Futures Position
Market Outlook	Neutral to Moderately Bullish with Protection Need
Risk Profile	Limited to Floor Level
Reward Profile	Capped at Ceiling Level
Time Horizon	30-90 days typical, can be longer for permanent protection
Capital Requirement	Zero net cost typical (costless collar), plus margin for underlying
Best Used When	Want to protect existing profitable position through uncertain period without selling, willing to cap upside for free protection

Want to protect existing profitable position through uncertain period without selling, willing to cap upside for free protection

Note	Stock holding must match option lot size for proper coverage

Stock Purchase	0.1% on buy side
Put Purchase	0.05% on premium (if ITM at expiry, 0.125% on settlement value)
Call Sale	0.05% on premium (if ITM at expiry, 0.125% on settlement value)
Total Cost Note	Factor STT into collar cost analysis

Stock Ownership	Fully paid stock - no margin needed
Short Call	Covered by stock ownership - no additional margin
Long Put	Premium paid upfront - no margin
Overall	Most capital-efficient hedging strategy for stockholders

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