Collar Options Calculator
Model your protective collar before you place it. Enter your stock price, put strike, and call strike to instantly see max profit, max loss, breakeven, and a full P&L diagram.
How to Use This Calculator
Four inputs and the calculator handles the rest. Results update instantly as you type.
Pull current market data (optional)
Type a ticker like AAPL and click Get Price. The calculator fills in the current stock price, dividend yield, and the risk-free rate from the 13-week T-bill, then loads the option chain so you can pick actual strikes and premiums.
Set up your collar legs
The collar legs are preloaded for you. Pick each strike, expiration, and premium straight from the option chain, or type your own numbers. The calculator works out implied volatility from the premium you enter, and you can still edit it. The stock leg is included automatically.
Calculate and read the results
Click Calculate P&L to see max profit, max loss, breakeven, return on risk, and probability of profit, plus position Greeks: delta, gamma, theta, vega, and rho.
Stress test before you trade
Drag the view-date slider to see your P&L curve on any day before expiration, shift implied volatility up or down 50 points, and scan the price-by-date P&L table to see how the trade behaves across scenarios.
This collar calculator prices each leg with your choice of an American-style binomial model (the default for US equity options) or European Black-Scholes-Merton, and accounts for dividend yield. You can set a per-contract commission, copy a shareable link to your exact setup, download the chart as a PNG, and switch to dark mode.
Understanding the Collar Strategy
Key numbers every collar trader needs to know before entering the position.
The collar strategy is built for investors who want to keep owning a stock while sleeping better at night. By combining a long protective put with a short covered call, you create a bounded range: the put prevents losses beyond a set level, and the call provides premium income that helps pay for that protection. When the premiums are equal, the collar costs nothing to enter — this is called a zero-cost collar.
Collars are especially popular around earnings events or periods of elevated uncertainty where a sharp drop is possible but you do not want to sell your shares. They are also used by employees holding concentrated stock positions who want to lock in a floor without triggering a taxable sale of the underlying shares.
The tradeoff is clear: the short call caps your upside. If the stock rallies strongly past the call strike, you will not participate in those gains above the strike. This makes the collar ideal for investors who are satisfied with a moderate profit range and prioritize protection over maximizing gains.
Collar Example Trade
You own XYZ at $100. You buy the $95 put for $2.00 and sell the $105 call for $2.50, entering the collar for a net credit of $0.50.
Using this option collar calculator
A collar wraps a stock position with a protective put below and a covered call above. This option collar calculator includes all three legs, so the P&L curve you see is the whole stock collar strategy, not just the options.
To test a zero-cost collar, pick a put and call whose premiums roughly offset and check that the entry cost reads near zero. The heatmap table then shows what the protected position is worth at each price and date, which is useful when you are hedging through a specific event like earnings or a lockup expiry.
Explore other options strategy calculators
Each strategy has its own dedicated calculator with a full P&L breakdown, worked example, and FAQ.
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See which collar positions are paying off
This calculator shows your trade setup before you place it. The next step is knowing which collar positions are profitable over time. Enter your email to get a free options trading journal that logs P&L, win rate, and breakeven across every trade.
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- Works with any broker. No app required.
Collar Options Strategy — Common Questions
Common mistakes when trading collars
A collar pairs a protective put with a covered call around stock you already own, so it trades some upside for a floor under your downside. Most losing collars come from getting the strikes, expirations, or assignment details wrong rather than from the strategy itself. These are the errors that show up most often.
1. Setting the short call strike too close to the stock price
The call you sell caps your gains at its strike. Place it just above the current price to collect more premium and you hand back most of the upside the moment the stock rallies. Use the calculator above to move the call strike and watch how the max profit line rises or flattens before you commit to a strike.
2. Ignoring the net cost of the collar
The put costs money and the call brings premium in. Whether the collar is a net debit, a net credit, or close to free changes your real breakeven on the stock. Read the net cost the calculator reports and factor it into your cost basis rather than treating the two option legs as separate trades.
3. Forgetting that the collar caps your upside
A collar is not a free hedge. In exchange for the downside floor, you agree to sell your shares at the call strike if the stock runs past it. Traders who size in expecting full stock-like upside are surprised when a strong rally leaves their gains stopped at the strike. Know that ceiling before you enter and pick a strike you would be content to sell at.
4. Mismatching the put and call expirations
A standard collar uses the same expiration for both legs so the protection and the cap line up. Put the protective put on a later date than the short call and you can be left holding uncovered stock after the call expires, or paying for protection you no longer intend to keep. Match the expirations unless you have a specific reason to stagger them.
5. Overlooking early assignment on the short call
The call you sold can be assigned early, most often just before an ex-dividend date when it is deep in the money. That forces your shares to be sold ahead of schedule and can cost you the dividend you were counting on. If you hold the stock for income, check the dividend calendar against your short call strike before you set the trade.
6. Setting the put strike so low it barely protects
Buying a cheaper, further out-of-the-money put lowers the cost of the collar, but it also widens the gap of unprotected loss between today’s price and the put strike. If that gap is larger than the drawdown you were trying to avoid, the hedge is not doing its job. The short call leg works the same way as a standalone covered call, so compare a plain covered call against the collar to see what the added put protection is actually buying you.