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September 29, 2021

67. Should We a Short Put to Help Fund a Collar Trade?

11 minutes

When we add a protective put to a covered call trade we now have a collar trade. There are 3 legs to this trade: long stock, short call (the ceiling) and long put (the floor). Since we pay for the protective put insurance, our returns will suffer. This podcast evaluates the impact of selling a put to help fund the protective put. Pros and cons are analyzed using Nvidia Corp..

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