By Lawrence G. McMillan
If you're concerned about downside risk in the current market, you may want to consider using a collar strategy to protect your stock positions. A collar allows you to hedge against significant losses by purchasing a put option while simultaneously selling a call option to offset the cost. This approach provides downside protection while still allowing for some upside potential. The link below will direct you to an article from our archives which explains the mechanics of collaring and how it can be an effective risk-management tool.
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