This article was originally published in The Option Strategist Newsletter Volume 19, No. 15 on August 13, 2010.
When one hedges risk in his portfolio – whether via broad-based index option strategies or via individual stock options – that doesn’t necessarily end the discussion. Later, especially if the underlying declines sharply in price, one has decisions to make. In this article, we’ll discuss those decisions as they apply to the somewhat popular strategy of “collaring” stock.
