Not applicable

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COLLAR has 2 components.

SELL CALL -Get revenue

BUY PUT -it cost you


So in my example it works in my favor.

Buy PUT  - $7

Sell Call - $2 (revenue)

Net Cost is $5

So PUT cost me $7.


In Put writing/selling there are 2 types of PUTS, Married PUT (Buy stock and Buy PUT at same time) and Just Buying protective PUT (which is my case).


Since I am achieving Long term tax gain via PUT (stock holding is long term but PUT I bought only 1 month ago). I don't think all of gain will be long term gain. I don't know answer. IRS is not business of handing over money.


Sale Price via PUT = $155 (at the time of PUT exercise stock closing Price was $140)

Cost Stock =$50

Cost Put = $7

Net = $155- $50-$7 = $98