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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.

Own the Stock Downside Protection Funded by Short Call Interactive P&L Diagram

Underlying Asset

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Strategy Template (optional — pre-fills legs below)

Option Legs

Legs with different expirations are supported (calendar spreads). Implied Vol % is used by the Black-Scholes engine for theoretical pricing.

Getting Started

How to Use This Calculator

Four inputs and the calculator handles the rest. Results update instantly as you type.

1

Enter your stock price

Enter the price at which you purchased or currently hold the 100 shares. This is the cost basis that anchors the profit and loss profile of the entire collar position.

2

Enter the long put

Enter the strike price and premium paid for the protective put you are buying. This caps your downside by giving you the right to sell your shares at the put strike if the stock falls below it.

3

Enter the short call

Enter the strike price and premium received for the covered call you are selling. This credit offsets the cost of the put, reducing or eliminating the net cost of your downside protection.

4

Review your results

The calculator instantly shows your net premium, max profit, max loss, and breakeven, plus a full P&L diagram showing how the collar performs at every stock price at expiration.

Strategy Breakdown

Understanding the Collar Strategy

Key numbers every collar trader needs to know before entering the position.

Max Profit
(Call Strike − Stock Price) + Net Credit
Achieved when the stock closes at or above the short call strike at expiration. The call caps your upside, but you still profit from the stock gain up to the call strike plus any net credit received when entering the collar.
Max Loss
(Stock Price − Put Strike) − Net Credit
Occurs when the stock closes at or below the long put strike at expiration. The put limits your downside loss to the difference between your stock price and the put strike, minus any net credit received.
Breakeven at Expiration
Stock Price − Net Credit (or + Net Debit)
When entered for a net credit, your breakeven is slightly below your stock purchase price. When entered for a net debit, your breakeven is slightly above it. A zero-cost collar entered at parity has a breakeven equal to the stock price.

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.

Worked Example

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.

Position Summary
Stock Purchase Price$100.00
Long Put Strike$95.00
Put Premium Paid−$2.00 / share (−$200)
Short Call Strike$105.00
Call Premium Received+$2.50 / share (+$250)
Net Credit+$0.50 / share (+$50)
Max Profit+$550 (stock at or above $105 at expiry)
Max Loss−$450 (stock at or below $95 at expiry)
Breakeven$99.50 ($100 − $0.50 net credit)
If Stock at $80 at ExpiryPut protects — loss capped at $450
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Collar trade tracker

See which collar positions are paying off

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FAQ

Collar Options Strategy — Common Questions

A collar is a protective options strategy where you own 100 shares of stock, buy an out-of-the-money put to protect against a large decline, and sell an out-of-the-money call to help fund the cost of that protection. The sold call caps your upside in exchange for reducing or eliminating the cost of the put. Collars are commonly used by investors who want to hold a stock while limiting downside risk without selling the shares outright.
The maximum profit on a collar is the short call strike minus your stock purchase price, adjusted for any net premium paid or received. For example, with stock at $100, a $105 short call at $2.50, and a $95 put at $2.00, your net credit is $0.50 and your max profit is ($105 − $100) + $0.50 = $5.50 per share, or $550 per 100 shares. This occurs when the stock closes at or above the short call strike at expiration.
The maximum loss on a collar is your stock purchase price minus the long put strike, adjusted for any net premium. Using the same example, the max loss is ($100 − $95) − $0.50 = $4.50 per share, or $450 per 100 shares. This occurs when the stock closes at or below the put strike at expiration. The put is what makes the collar protective — without it, losses on the stock position would be much larger in a severe downturn.
The breakeven on a collar is your stock purchase price adjusted for the net premium. If you received a net credit (call premium exceeds put premium), subtract the credit from the stock price. If you paid a net debit, add the debit to the stock price. For example, with stock at $100 and a net credit of $0.50, the breakeven is $99.50. A zero-cost collar entered at equal premiums has a breakeven exactly equal to the stock purchase price.
A covered call involves owning 100 shares and selling a call option to collect income, but offers no downside protection beyond the small premium received. A collar adds a protective put to that structure, capping your downside at a defined level. The call premium typically offsets some or all of the put cost. A collar sacrifices more upside than a standalone covered call but provides meaningful protection against a sharp decline, making it better suited for investors who want insurance, not just income.

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