Collar
BullishLimited profitLimited loss
Spot + protective put financed by a short call; both sides capped.
Payoff at expiry — live BTC example
Net debit
$74,444
Max profit
$1,156
Max loss
$1,044
Breakeven
74,444
Example legs (0.4 DTE front)
- Buy spot
- Buy 73,400 put
- Sell 75,600 call
Entry greeks (per 1 BTC notional): Δ 0.585 · Γ 0.0097 per 1% · vega $0.17/pt · theta $6.28/day
How it works
The short call premium pays for (most of) the put: downside is floored at the put strike, upside capped at the call strike.
When to use it
You want cheap protection on a long position and accept a ceiling — common for concentrated holdings.
Risks & management
Opportunity cost above the call strike. A zero-cost collar is never actually free: the cap is the price.
Related structures
Example built from live Delta Exchange BTC marks on the nearest constructible expiry; numbers refresh with the chain. Educational content, not investment advice.