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Special Report on

Using a Stock Option Collar

using a stock option collar special research report Photo by www.thestreet.com
Under the Option Symbology Initiative, a new protocol has been put in place to make options symbols simpler and more intuitive. The changeover to the new system began in late 2009 and was fully rolled out by May 2010.  All the basic components of an option are included in its symbol: the root symbol , the expiration date , the call/put indicator , and the strike price . Using these components, it is easy to describe any American equity option without having to look it up.  This guide will walk you through the new method so you can be up-to-date next time you want to buy or sell options. To help you understand the new ...
positions which appear identical, the potential stock option return may be useful for determining which position has the highest relative potential return.
REVIEWS AND OPINIONS
U.S. Stock Market Snaps A Seven Session Losing Streak | Daily Markets
While the market did hold some gains, it became very apparent who is in control of this market — the bears. It is worth taking a look at the safety trade, Bonds, specifically TLT, TIP, and LQD are on a tear. If you look at TLT which is the iShares Barclays 20+ Year Treasury Bond Fund (TLT) , it has broken resistance of $100, even in the face of long term rates under 3% (there could be more bull call spreads coming to light if $100 is held). Volatility is also on the move and it’s now at a moderate level that when mixed with this down trending market, could start to shake out weak longs. This could also pique ... market research, surveys and trends
Options Collars - Using Option Collars to Hedge in a Volatile Market
We talked about the premium collection way, which was selling calls to bring money in to help offset any loss we would have if the stock started to trade down. The advantages of this form of hedging are that we do not have to put out any money to do it and our downside coverage picks up immediately. The disadvantage is that our position is only covered as far down as the premium collected. If the stock trades down further than that, we lose dollar for dollar as far down as the stock may go, so this is a minimum coverage hedging strategy. The other form of hedging is the premium outlay way, which is to buy puts. Here, we would be ... market research, surveys and trends

SURVEY RESULTS FOR
USING A STOCK OPTION COLLAR

It was in the depths of the Great Depression that
... can run to 55 percent including state taxes) but just a capital gains tax ( of 15 percent) on ... ciary sells the stock in the open market for $15 million but pays estate tax on the DOD .... and sells a call option allowing the call buyer to purchase ... consider using a collar written on an entire portfolio. ... industry trends, business articles and survey research
Employee Stock Options (ESOPs) and Restricted Stock:Valuation ...
1 Employee Stock Options (ESOPs) and Restricted Stock:Valuation Effects and ConsequencesAswath DamodaranStern School of BusinessSeptember 2005 Page 2 2Management Options and Restricted Stock: Valuation Effects and ConsequencesIn the last decade, firms have increasingly turned to offering employees optionsand restricted stock (often with restrictions on trading) as part of compensation packages.Some of this trend can be attributed to the entry of young, cash poor technology firmsinto the market, many of which have to use equity because they have no choice.However, many larger market cap firms that can afford to pay cash ... industry trends, business articles and survey research
RELATED NEWS
Malcolm Berko: Taking Stock
My broker is pushing a stock called Golub Capital and trying to sell me 700 shares. I don’t like the sound of the name, but he is pushing so hard that I’m about to tell him to “stuff it.” He’s also pushing something called the Collar Fund, which involves options. It’s difficult for me to understand, but he wants me to invest $20,000. My son likes the guy and told me to give him a chance. Please advise. — N.R., Ann Arbor, Mich. Dear N.R.: Last April, Wells Fargo and UBS took Golub Capital public ( GBDC — $13.95 ) with an IPO of 7.1 million shares at $14.50, raising $96 million after ... market trends, news research and surveys resources
Why GOP obstruction will benefit Republicans
for some time, so I'm glad to see that this perverse dynamic is starting to get more attention: It seems likely that GOP obstruction, far from being a liability to Republicans, will play in their favor , because voters may mostly blame the ruling party for government dysfunction. As you know, more and more Dems have been arguing that Republicans are trying to tank Dem policies in order to ensure that the economy remains in the toilet, helping them this fall. But it goes further than this: Republicans will benefit not just from the struggles of the economy, but the perception of government's inability to help the ... market trends, news research and surveys resources

INFORMATION RESOURCES

Options Strategy Lab - Collar Trade
Place a collar on the long stock position if the stock .... Option System Analysis strategies are tested using OptionVue's ... technology research, surveys study and trend statistics
Stock Options: National Compensation Survey Update
conducted its first statistically valid survey on the incidence of stock options among U.S. workers. The Pilot Survey on the Incidence of Stock Options in Private Industry in 1999 collected data from a representative sample of establishments in all 50 States and the District of Columbia. The survey covered only the incidence of stock options granted during the 1999 calendar year. The initial results of the pilot study were published in an October 2000 news release , 1 and more detailed information (including data on provisions or plan features) was made available the following spring in Compensation and Working Conditions . 2 As ... technology research, surveys study and trend statistics
Derivatives and tax strategies
You have hold vested options to buy 15,000 shares at an average strike price of $16. The market price of the stock is now $90. Should you: Sell calls against the stock? Use a zero-cost collar to lock in the existing appreciation and defer the time until the at which income is recognized and taxes are paid? In the case of a collar, what strike and expiration date should be chosen for the two legs of the collar? Here are two questions to consider: If your options were tradable, would you be willing to sell them today for their fair value in the marketplace? How different is the fair value of a tradable option (with the same ...
REAL TIME
USING A STOCK OPTION COLLAR
QUESTIONS AND ANSWERS
When would you buy a put option and sell a call option ? - Yahoo ...
If you want to open a short position on a stock, but your broker does not have shares available to be shorted, you can create a synthetic short stock position by buying a put and selling a call where both option have the same strike price and expiration date. (2) To create a conversion This combination of a long position in the underlying plus a synthetic short stock position is called a conversion. It is considered a "risk-free" spread, although it is subject to pin risk. (3) To create a collar A collar is usually a hedge against an existing long position in the underlying. It is usually created by selling an out of the money ...
Beginner Investing: S&P index put option, downside protection, vix ...
I have an online account with an inexpensive broker.  I have invested for over 30 years in stocks, mutual funds and occasionally buying or selling puts and calls, depending.  But I have never done anything with index options so would appreciate a little education on a specific trade I want to do.   I am long about $200K in various stocks and mutual funds.  I do have diversification in real estate and even metals outside of stock holdings, but I want to add a little insurance on that long position.  And not through a bear fund which is essentially dollar for dollar.  I am willing to "buy" ...