zero cost collar
This is a collar where the money you collect from selling the call pays for the put, so the whole setup costs you little or nothing up front.
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Words beside it
- Basis (cost basis)
What you paid for an investment, including commissions, used to compute gains for tax.
- collar
A strategy where you buy a put option and sell a call option on the same shares to limit both your losses and gains.
- Cost basis
What you paid, including commissions, used to figure the gain when you sell.
- Dollar cost averaging
Investing a fixed amount on a schedule regardless of price.
- Fixed costs
Costs a business pays regardless of sales volume: rent, salaries, insurance.
- Opportunity cost
What you gave up by choosing this over the next best thing.
- Variable costs
Costs that rise with each unit sold: materials, shipping, processing fees.
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