Collar option strategy for beginners

What is Collar Option Strategy for Beginner?

A collar option strategy is one of the popular option trading strategy. Typically, it used to limit both trades (gains and losses). Traders can create collar option and implement it as a strategy by holding the underlying stock they are trading. It allows the trader to buy an out of the money put option, as well as selling that stock out of the money call option under the same trade. Let’s see how the collar option strategy for beginners work in this trading industry.