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Buy and Hedge: The 5 Iron Rules for Investing Over the Long Term
book

Buy and Hedge: The 5 Iron Rules for Investing Over the Long Term

by Jay Pestrichelli, Wayne Ferbert
September 2011
Intermediate to advanced
304 pages
6h 29m
English
Pearson
Content preview from Buy and Hedge: The 5 Iron Rules for Investing Over the Long Term

21. Collars

“I have strong feelings about gun control. If there’s a gun around, I want to be controlling it.”

—Tommy Nowak (played by Clint Eastwood) in Pink Cadillac (1989)

This quote by Clint Eastwood’s character reminds us that what we control is risk, not return. Although being able to forecast outcomes is unpredictable, being able to define potential results is well within the investor’s control. Collars are strategies that “collar” a stock by defining the upper and lower price limits through options. As you’re learning, Options can provide many different solutions for how investments are structured. In the preceding chapter you learned about a married put and that for a price, you can protect your long stock. Well, believe it or not, you ...

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Publisher Resources

ISBN: 9780132825290Purchase book