Owning Stock and the Collar Trade

Owning a stock and using a collar trade is a way to profit. Prior to earning announcements, always use a protective put. Also use RSI and MACD confirmation.

Only use puts when you need them. At a level of resistance there is no reason not to buy a put.

Don’t take a bearish position when at level of support. Don’t take a bullish position when at a level of resistance.

Remember, earnings are the only thing that pushes stocks past resistance and changes market sentiment. It’s important to protect yourself prior to earnings announcements.

As long as a stock has volatility and momentum you have a good chance to make money on the collar trade.