JPMorgan falls hard
Below $300 the put gains a dollar for every dollar the shares lose. You can sell the shares at $300 by exercising it, or sell the put and keep the shares.
At $232.11 the collar loses $3,128; the shares alone lose $9,947
Options Collar: How the Collar Strategy Works, With a Real JPMorgan Trade
An options collar puts a floor and a ceiling on shares you own. You buy a put below the price, which sets the most you can lose, and sell a call above it, which pays for the put and caps what you can make. When the call pays for all of the put, it's a zero-cost collar.
On 23 October 2026 JPMorgan closed at $331.58. On 100 shares, buying the 15 January 2027 $300 put cost $455 and selling the $360 call paid $485, a $30 credit. Until 15 January the most those shares can lose is $3,128 (9.4%) and the most they can make is $2,872 (8.7%), however far JPMorgan moves.
A collar in three numbers
What it costs
Put − call
$4.55 − $4.85 = −$0.30, a $30 credit
The floor
Put strike + credit
$300.30: the most you can lose is $3,128
The cap
Call strike + credit
$360.30: the most you can make is $2,872
Cost today+$30The $360 call paid for the $300 put with $30 to spare
Worst case by 15 Jan−9.4%−$3,128 on $33,158 of JPMorgan, even if it falls 30%
Best case by 15 Jan+8.7%+$2,872, even if JPMorgan rises 20%
A collar example: JPMorgan, 23 October 2026 to 15 January 2027
Real prices from the 23 October close. Drag where JPMorgan might close on 15 January, when both options expire, and compare the collar with the shares alone and with the $300 put alone.
JPMorgan Chase (JPM)Closed at $331.58 on 23 October 2026
- Own100 JPMorgan shares$33,158
- Buy 1$300 put, 15 Jan 2027at $4.55
- Sell 1$360 call, 15 Jan 2027at $4.85
- Net cost
- +$30 credit
- Floor, below $300
- −$3,128
- Cap, above $360
- +$2,872
- Breakeven
- $331.28
- Room between floor and cap
- 18.1%
- Moves like
- 57 shares
The put has a delta of −0.18 and the call 0.25, so today the collar moves like 57 shares. Both strikes are about the same distance away: the put 9.5% below the price, the call 8.6% above.
Where does JPMorgan close on 15 January?
CollarShares aloneShares and the $300 put
Collar−$3,128−9.4% on $33,158
Shares alone−$6,632−20.0%
Shares and the put−$3,613−10.9%
JPMorgan ends 20.0% down. The put lets you sell at $300, so the collar stops at −$3,128 while the shares alone lose $6,632.
At expiry each option is worth only what it's in the money, so the lines are exact. A $165 January dividend, if JPMorgan pays one as in past years, is left out. Each line would collect it, unless the collar's call is assigned the day before.
Collar payoff: the same shares with and without the options
Profit or loss on 15 January on 100 JPMorgan shares bought at $331.58. Between $300 and $360 the collar moves dollar for dollar with the shares; outside that range it stops.
| JPMorgan on 15 Jan | Collar | Shares alone | Shares and the put paid $455 |
|---|---|---|---|
| $232.11 falls 30% | −$3,128 | −$9,947 | −$3,613 |
| $265.26 falls 20% | −$3,128 | −$6,632 | −$3,613 |
| $300.00 the put strike | −$3,128 | −$3,158 | −$3,613 |
| $315.00 falls 5% | −$1,628 | −$1,658 | −$2,113 |
| $331.58 unchanged | +$30 | $0 | −$455 |
| $348.16 rises 5% | +$1,688 | +$1,658 | +$1,203 |
| $360.00 the call strike | +$2,872 | +$2,842 | +$2,387 |
| $397.90 rises 20% | +$2,872 | +$6,632 | +$6,177 |
JPMorgan stays between the strikes
Both options expire worthless. You keep the shares and the $30, and you're free to set up the next collar.
Unchanged at $331.58: +$30, against −$455 for the put alone
JPMorgan runs past $360
The call is assigned and your shares are sold at $360. That's the price of the free put: every dollar above the cap belongs to whoever bought your call.
At $397.90 the collar keeps +$2,872; the shares alone make $6,632
Choosing the strikes of a zero-cost collar
JPMorgan's 15 January options at the 23 October close: each put at the ask, and a call at the bid that pays for all or nearly all of it. The closer the floor, the closer the cap.
| Put bought | Call sold | Net | Most you can lose |
|---|---|---|---|
| $290 at $3.05 | $370 at $2.91 | −$14 | $4,172 |
| $300 this guide | $360 at $4.85 | +$30 | $3,128 |
| $310 at $6.65 | $350 at $7.80 | +$115 | $2,043 |
| $320 at $9.55 | $340 at $11.65 | +$210 | $948 |
| $330 at $13.40 | $330 at $16.80 | +$340 | None |
Puts cost more than calls the same distance away, because more investors want to buy protection than to give away their gains. On 23 October the $300 put was priced at 25.9% volatility and the $360 call at 22.3%, which is why the free cap sits a little closer to the price (8.6%) than the floor (9.5%). And the last row isn't a collar any more: with both strikes at $330, the result is $182 whatever happens, which is the same as selling the shares for $333.40 in January. A pair that tight can be taxed as a sale.
Choosing the expiry: more time buys a higher cap
The same $300 put at four expiries, at the 23 October ask, and the highest call whose bid pays for it.
| Expiry | Days | $300 put | Call that pays for it | Net | Cap |
|---|---|---|---|---|---|
| 18 Dec 2026 | 56 | $2.47 | $355 at $3.45 | +$98 | +7.1% |
| 15 Jan 2027 this guide | 84 | $4.55 | $360 at $4.85 | +$30 | +8.6% |
| 19 Mar 2027 | 147 | $7.90 | $365 at $8.25 | +$35 | +10.1% |
| 17 Jun 2027 | 237 | $11.80 | $370 at $12.65 | +$85 | +11.6% |
The floor stays at $300, but each step out in time lifts the cap: from $355 in December to $370 in June. The longer collar gives JPMorgan more room to rise and protects you for longer without another trade. The cost is in the quotes. Later expiries trade less, so the gap between bid and ask widens, and you cross it on both legs. On the January collar, buying at the ask and selling at the bid cost $37.50 against the midpoints; at midpoint prices the same collar would have paid $67.50.
How often the floor and the cap mattered: 20 years of JPMorgan
JPMorgan's price change over every 12-week stretch since October 2006, the length of this collar, with today's floor (−9.5%) and cap (+8.6%) laid over it.
JPMorgan's 12-week moves since October 2006
Put pays: below −9.5%Between the strikesCapped: above +8.6%
Each bar is a 2% bucket of JPMorgan's price change over 57 trading days, the trading days from 23 October 2026 to 15 January 2027, for every start date from 23 October 2006 to 4 August 2026. The end buckets also hold every move past −28% and +28%. It lays this collar's strikes over past prices; it doesn't price past options.
The put paid
- Stretches
- 13.9%
Between the strikes
- Stretches
- 55.7%
The cap bit
- Stretches
- 30.4%
The worst stretch
- Shares
- −50.5%
- Collar
- −9.4%
Over these 20 years JPMorgan rose more often than it crashed, so the cap cost something twice as often as the put saved something. On average a 12-week stretch made 3.2% on the shares and 1.8% inside the collar's range, and the swings were half as wide: a standard deviation of 6.7 points against 13.3. A collar suits a holder who cares more about the bad 14% than the extra gains, such as someone with a big unrealized gain or a large share of their wealth in one stock. For an index version over 18 years, see how Cboe's collar index did in our protective put guide.
Managing a collar: rolling, earnings, dividends and assignment
The cards use the $300/$360 JPMorgan collar. Prices after 23 October are model values with each option's 23 October volatility.
JPMorgan rallies: roll the collar up
Close both options and open a later collar with higher strikes. Closing the call costs more than the put brings back, but the new collar locks in most of the rise.
JPMorgan at $365 on 11 December: close the pair for about $12.98 and open a 19 March $330/$390 collar for a credit of about $4.29. The floor rises from −$3,128 to −$997 and the cap from +$2,872 to +$5,003
JPMorgan falls through the floor: sell or exercise
Before expiry the put is worth a bit more than what it's in the money. If you want to keep the shares, sell the put and keep that time value. If you want out, buy back the call, now worth next to nothing, and exercise the put to sell at $300.
JPMorgan at $290 on 8 January: the put is worth about $10.88, $0.88 more than the $10 it's in the money
Earnings sit inside this collar
JPMorgan reported its fourth quarter between 12 and 15 January in each of the last five years, so results will very likely come out before this collar expires. A gap either way lands on the floor or the cap, which is what the collar is for.
Past reports: 14 Jan 2022, 13 Jan 2023, 12 Jan 2024, 15 Jan 2025 and 13 Jan 2026
Early assignment and the dividend
A short call deep in the money can be assigned the day before the stock goes ex-dividend, when its time value is less than the dividend. JPMorgan has gone ex-dividend between 4 and 6 January in each of the last six years.
JPMorgan at $375 on 5 January: the $360 call has $1.08 of time value against a $1.65 dividend, so expect assignment. At $370 it has $1.93
Collar vs protective put vs covered call
Four things you can do on 23 October with 100 JPMorgan shares, through 15 January.
| Strategy | What you do | Cost today | JPMorgan −20% | JPMorgan +20% | The catch |
|---|---|---|---|---|---|
| Hold the shares | Nothing | $0 | −$6,632 | +$6,632 | The whole fall is yours |
| Protective put | Buy the $300 put | $455 | −$3,613 | +$6,177 | You pay for the cover every time |
| Covered call | Sell the $360 call | $485 paid to you | −$6,147 | +$3,327 | Income, but the fall is still yours |
| Collar | Buy the put and sell the call | $30 paid to you | −$3,128 | +$2,872 | Gains stop at $360 |
The fifth choice is to sell the shares. That ends the risk, but it also realizes the gain now, and for many collar users the tax bill is the reason they're still holding. A collar keeps you in the stock with a known worst case. If you want protection and can live with the cost, the protective put keeps the upside open; a put spread collar also sells a lower put, which makes the trade cheaper but stops the protection below that strike.
How a collar is taxed in the US
IRS Publication 550 treats a put bought on stock you own as an offsetting position, so a collar falls under the straddle rules, and a very tight one can count as a sale.
The put makes it a straddle
A loss on one side is deferred up to the unrealized gain on the other at year-end. If you've held the shares a year or less when you buy the put, their holding period starts again when the collar ends; shares already held over a year stay long-term.
The qualified covered call exception doesn't help here: it covers a short call alone, not one with a put
Expiry, exercise and assignment
A call that expires is a short-term gain and a put that expires is a capital loss. If the call is assigned, its premium is added to the sale price; if you exercise the put, its cost comes off it.
Assigned at $360: you sell for $364.85 a share. Put to $300: you sell for $295.45
Too tight is a sale
A collar that removes nearly all your risk and nearly all your gain can be a constructive sale under section 1259, taxed as if you sold. The law sets no exact width. The $330/$330 pair above is a sale in all but name; the $300/$360 band leaves an 18% range.
That's why holders who collar a big gain in the autumn and sell in January keep the band wide
Other countries have their own rules. Our options tax tracker keeps each closed option and the open ones apart for your report.
Five collar mistakes
Calling a zero-cost collar free
It costs nothing in cash and pays for itself in upside. In 30.4% of JPMorgan's 12-week stretches since 2006 the shares rose past the cap, with a median of 5.8 points given up.
Selling a call on shares you can't afford to sell
If JPMorgan ends above $360, your shares are sold and the whole gain is realized, the tax bill many collar users wanted to put off. Pick the call as a price you'd be content to sell at.
Making it so tight it's a sale
A $320/$340 collar leaves 6% of room, and $330/$330 leaves none. Past a point you've sold the shares in all but name, and the IRS can treat it that way.
Forgetting the dividend date
JPMorgan usually goes ex-dividend in the first week of January. With the call deep in the money that week, expect to be assigned the day before and to miss the $1.65.
Paying the spread on a thin expiry
The June $300 put's quotes were $1.05 apart and the $370 call's $1.40, against $0.45 and $0.30 for January. Opening the June collar at the ask and bid cost $122.50 against the midpoints, and closing early costs part of it again.
Track your collars
A collar is three positions doing one job. AllInvestView shows the put and the call with the shares they protect, whether the trades sync from your broker or come from a file.
Options book
One collar, not a stock and two loose options
When you hold the shares, a long put below the price and a short call above it on the same stock, the options book groups them as a collar. You see the floor and the cap next to the shares, not a losing put and a short call on their own.
- The collar's delta dollars and daily theta, and days to expiry
- Earnings before expiry flagged on the position
- Close, roll or record an assignment on legs you enter yourself
- Every closed option's result kept for the tax report
AllInvestView
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Questions about the options collar
What is a collar in options?
A collar is a put bought and a call sold on shares you own. The put sets a floor under the shares and the call sets a cap on them, and the premium from the call pays for some or all of the put. On 23 October 2026 a collar on 100 JPMorgan shares at $331.58 limited the result by 15 January to between a $3,128 loss and a $2,872 gain.
What is a zero-cost collar?
A collar where the call you sell brings in at least what the put costs, so you pay nothing up front. Buying JPMorgan's 15 January $300 put at $4.55 and selling the $360 call at $4.85 left a $30 credit. You still pay for the protection: any gain above the call strike goes to whoever bought the call.
How do you choose the strikes for a collar?
Start with the put: the most you're willing to lose. Then find the call whose premium pays for it. The closer the put, the closer the call has to be. For JPMorgan in January, the $350 call paid for the $310 put, while the $290 put needed the $370 call and $14 more. Pick the call as a price you'd be content to sell at.
What is the max profit and max loss of a collar?
The max loss is the price you paid for the shares minus the put strike, plus what the options cost or minus the credit. The max profit is the call strike minus the share price, plus the credit or minus the cost. For the JPMorgan collar: $331.58 − $300 − $0.30 = $31.28 a share, $3,128, and $360 − $331.58 + $0.30 = $28.72 a share, $2,872.
Is a collar better than a protective put?
It's cheaper and gives up more. The $300 JPMorgan put alone cost $455 and left the upside open; the collar cost nothing but stopped gains at $360. If JPMorgan rose 20% by January, the shares with the put would make $6,177 and the collar $2,872. Choose the collar when the cost of the put matters more to you than the gains above the cap.
When should you use a collar?
When you want to keep shares but can't afford a big fall in them: a large unrealized gain you don't want to realize yet, a big part of your wealth in one stock, or a period you'd rather not carry the full risk, such as earnings. In 20 years of JPMorgan's 12-week moves, the $300/$360 band would have halved the swings.
How is a collar taxed in the US?
The put on stock you own makes a straddle, so losses can be deferred and, on shares held a year or less, the holding period starts again when the collar ends. The call's premium is a short-term gain if it expires, or part of the sale price if it's assigned. A collar so tight it removes nearly all risk and gain can be taxed as a sale under section 1259.
Sources
Checked on 25 October 2026.
- Options Industry Council: collar (protective collar)
- The Options Clearing Corporation, Characteristics and Risks of Standardized Options, exercise and assignment of American-style options
- IRS Publication 550, Investment Income and Expenses, puts and calls, straddles, qualified covered calls and constructive sales
- 26 U.S. Code § 1259, constructive sales of appreciated financial positions, and § 1092, straddles
- JPMorgan Chase investor relations, past earnings and dividend dates
- JPMorgan closing price and option quotes (bid and ask) for 18 December 2026, 15 January, 19 March and 17 June 2027 at the 23 October 2026 close; JPMorgan daily closes from October 2006
Costs use the ask for options bought and the bid for options sold, before commissions. In the worked examples, deltas and every value before expiry come from AllInvestView's Black-Scholes engine with a 3.94% rate, a 1.99% dividend yield and each option's volatility solved from its midpoint price, held fixed (25.9% for the $300 put, 22.3% for the $360 call). Values at expiry are what each option is in the money. The 12-week moves are JPMorgan's price change over each overlapping stretch of 57 trading days, using closes adjusted for splits, without dividends.