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Tag: zero-cost-collar

Visualization of a protective put and call sharing the same seesaw, illustrating downside protection and capped gains for zero cost collars

Zero Cost Collar: Understanding This Options Strategy to Cap Losses and Set Floors

October 17, 2025 FinanceFacts101 Investments

What is a Zero Cost Collar? A zero cost collar represents a unique options strategy aimed at protecting an investor from potential losses in an underlying asset by limiting both the upside and downside risks. This approach is commonly employed when substantial gains have been achieved within a long position.

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