Lead-Lag Live Collar Strategies: Protecting Downside While Keeping Upside Alive
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Sep 19, 2025 Discover how traders effectively use the collar strategy as a dynamic insurance policy for their portfolios. The discussion dives into crucial risk management practices over stock picking, illustrated by real examples from Apple and Nvidia. Learn how collars offer flexibility in protecting investments while maintaining upside potential. Plus, gain insights into advanced adjustments and the importance of viewing diversification as managing opportunities, not just spreading investments.
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Collar As A Dynamic Tool
- A collar is three tradable instruments: long equity, short call, and long put that you can move independently.
- Treat collars dynamically to adjust strikes and expirations to fit objectives and market trends.
Origins During The Internet Bubble
- Greg discovered collars during the internet bubble bursting about 25 years ago and it transformed his risk view.
- He treats collars like insurance you can apply during 'hurricane season' in markets.
Use Options To Control Risk
- Manage portfolio risk with options, not just position sizing; collars let you control downside without shrinking allocations.
- Use protective puts within collars to insure concentrated holdings instead of forced diversification by ticks.
