Two investors can have the exact same objective:

• Protect against a large decline.

• Keep as much upside as possible.

• Create liquidity without immediately selling.

...and end up with completely different collar terms.

It all depends on the options market of that particular stock.

The relative pricing of puts and calls changes from company to company and even from month to month.

Sometimes the options market lets you keep significantly more upside while paying for downside protection.

Sometimes it doesn’t.

For example, this proposal allows a TSLA holder to:

• Protect roughly 80% of the current value.

• Continue participating in gains up to roughly 2× the current stock price.

• Borrow approximately $600,000 against the position.

(Illustrative example. Actual terms depend on the stock, market conditions, option pricing, and the investor’s objectives.)

These structures are highly customized so until someone actually prices the collar on your stock, nobody knows what the economics will look like.

That’s why we always start with the numbers before discussing whether the strategy makes sense.

These structures typically involve tradeoffs — for example, capping some upside in exchange for downside protection, or taking on financing costs and market risk when borrowing against the position. They also carry real complexity and are not appropriate for everyone.

Hypothetical illustration for educational purposes only. Actual collar terms depend on real-time options pricing for the specific security and will vary. Not a recommendation to buy, sell, or hold any security, and not tax, legal, or investment advice.

Quantitative Financial Strategies, LLC is an investment adviser registered with the U.S. Securities and Exchange Commission. Investing involves risk, including possible loss of principal.

*Gross rate annualizes box interest, the 0.35% annual management fee, and the collar premium against net upfront liquidity. Tax benefit is
hypothetical Section 1256 deductibility on box-spread interest only; consult tax and legal advisors.