Are all collars vertical or can they be diagonal? If so, how do you specify which collar you are speaking of?
This thread has become a real chuckler Piezoe, you mandated a thank you and it appeared in 4 minutes. I'm impressed! Iplay1515, your thank you is accepted. I hope to be able to assist you in the same manner in the future Forex-Forex, thank you for the golden shower analogy
What part of the previous/following isn't clear? "Vertical is redundant when takling about a collar. It is assumed that all components are of the same expiration unless it is stated otherwise."
Based on a small sampling of the 40+ million hits from the google search, it certainly appears that vertical is the assumption as you indicated given that there were numerous references to diagonal collars and no mention of vertical collars. Were it not for the use of the term "vertical collar" by a notable author and instructor, this thread would not exist. The above coupled with the fact that with option strategies, there appears to be an abundance of different names for the same strategy which creates significant confusion for all.
In Greek Mythology, Piezoe is a lesser god but a god no less. ------- Avoid the temptation to Google "google". That will destroy the Internet. - Steve Martin
So back to draining the swamp. When using a collar to insure against an opening gap for a long equity position held overnight, how does one determine the optimum coverage for the least premium? For example, the equity was purchased at 50 and the current market is also 50 and the intent is to close the collar after the market opens the following day. What is the recommended process to begin the analysis? Is there a recommended app. for this analysis? ----------- "One of the problems with information obtained from the Internet is one can never be sure of it's validity" - Abraham Lincoln
If you're going to Google and parse every single option related word, it might be 2016 by the time you get to the chapter on "vertical" spreads which is the same strategy as your so called vertical collar.
Spindr0, Elite Trader is one of the best resources available, so yes, the time and effort to post here certainly qualifies, and the opportunity to meet and converse with such an esoteric group is priceless.