Stocks & Commodities V. 26:12 (62): Explore Your Options by Tom Gentile

Stocks & Commodities V. 26:12 (62): Explore Your Options by Tom Gentile
Item# \V26\C12\EYO.pdf
Availability: In Stock

Product Description

Explore Your Options by Tom Gentile


I have a collar on a stock. I am still very bullish and the stock has come down quite a bit, so when does it make sense to buy back the call for a profit and let it ride?

The collar is becoming a more popular strategy after the latest selloff. A lot of investors who want to buy are looking at how far some stocks have fallen. The problem is, prices are still falling and volatility is high. Fear is at an extreme, and many investors are reluctant to buy stocks despite the bargains that now seem to exist.

The collar offers a limited-risk way to buy stocks. The trade is a combination of a protective put (long puts, long stock) and a covered call (long stock, short calls). It is created by buying shares, buying puts, and selling calls (and can also be applied to an existing position). The put provides a floor under the stock and the sale of calls helps pay for the put. In addition, since implied volatility is so high right now, option premiums are very expensive and it makes sense to sell some call premium to pay for the put options.

*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at users can view the S&C Digital Edition in the subscriber's section on

Take Control of Your Trading.
Professional Traders' Starter Kit
All these items shown below only $299.99!
  • 5-year subscription to Technical Analysis of STOCKS & COMMODITIES, The Traders' magazine. (Shipping outside the US is extra. Washington state addresses require sales tax based on your locale.)
  • 5 year access to S&C Archive
  • 5 year access to S&C Digital Edition
  • 5-year subscription to Advantage.
  • 5-year subscription to Working Money.
  • Free book selection.
  • Click Here to Order