The collar strategy is a risk-defined method that could be ideal for traders who want downside protection in a stock they already own.
Although it limits upside potential, the collar strategy is designed to add downside protection by “collaring” the stock’s price between a “floor,” and a “ceiling.”
In yesterday’s MarketMinds episode, Mike Shorr guest hosted to explain what the Collar Strategy is and how it works.
With Micron Technology Inc. (MU) reporting earnings tomorrow, he used it as an ideal example for putting this strategy into action.
The analysis, insights, and strategies shared by Prosper Trading Academy’s coaches in Prosper Insider are strictly for educational and informational purposes only. All content reflects the personal opinions of the coaches and should not be construed as specific investment advice or recommendations. Any examples discussed are illustrative in nature and do not represent actual live trade signals or instructions to buy or sell securities. Trading involves risk, and individuals should carefully evaluate their own financial situation before making investment decisions.
Mike’s breakdown covers:
- How the collar strategy is designed to provide potential downside protection
- Why earnings is an ideal scenario for putting the collar strategy into action
- Using calls and puts to set up your “floor” and “ceiling”
- The importance of trading OTM options when using this strategy
- Why Implied Volatility (IV) can be a crucial indicator for considering the collar strategy
Did you know Mike sends weekly Live Trade Signals?
His Slingshot Trades Program delivers at least one trade idea each week in a stock that Mike believes looks poised to make a potentially explosive move.
Using the same strategies and indicators that are helping his trade signals show over 180%* results in 2025, Mike gives a detailed breakdown for each trade, including:
- The stock name and ticker
- Potential entry and exit points
- Which option strategy to consider
- Strike prices
- Expiration dates
Mike literally does all the heavy lifting. All you have to do is decide whether you’re going to take the trade.
Mike recorded this video breaking down how his Slingshot Trades Program works
