My SuperCollar construct

Q

Quanto

I've extended my "ExtendedCollar" construct and dubbed the resulting new construct "SuperCollar".
It consist of LS + SC + LP + SP (or said differently: CC + LP + SP).
They both are intended for options with high ATM IV (for the SC and SP legs, whereas the LP leg prefers low IV).

https://optioncreator.com/stf2fnf
SuperCollar.png
 
Overnight said:
But if the options represent 100 shares, why are you long only 1 share the underlying?
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This is just technicality, for simplicity, and also b/c that tool uses such units, ie. 1 option controls 1 stock share.
One would enter Qty 100 for both stock and option to get 1 option contract and 100 stock shares.
1 option in this tool means 1/100 of an option contract (or to be exact: 1/multiplier).
As said, just a trivial convention. It's not that important.
Experts usually operate with the smallest base units (ie. 1), multiplying the endresult by the multiplier (ie. usually 100) only at the end.
 
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Of course the K's are free to chose, not necessarily bound to be ATM.
What matters is the typical end result of the PnL diagram. Ie. reducing the risk (loss) and maximizing the profit, either for both sides or just for one side (one can control this by varying the parameters K, Q, DTE, etc.).
LP.Q is important and also sensitive... :)

It consist of LS + SC + LP + SP (or said differently: CC + LP + SP).
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A more complete statement is this:
"It consist of LS + SC + LP + SP (or said differently: CC + LP + SP, aka Collar + SP)."

What's nice about this contruct is also the fact that it can be used also in a CashAcct
that allows CoveredCall and CashSecuredPut trading.
Ie. MarginAcct (thx, but no thx :-)) NOT needed!... :)
 
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Hot Tip:
Both these constructs are about first locking an unrealized profit with minimum LP.Q, and then waiting for the Puts to become cheaper (due to time decay, IV decline, stock rise etc), and then to increase LP.Q (or even use additional LP.K).
Ie. the subsequent rest of the LPs gets financed from the above said initial unrealized profit...
This is for a bearish assumption (ie. for a sharp fall of the underlying due to the "expected event", like FDA decision etc), with the bull side being neutral or positive (ie. PnL >= 0), or capped with a minimal loss.
Ie. concentrating on the the left side of the PnL chart...
The goal is to win big, or win moderate, or win zero w/o any loss (or with just a minimal loss); cf. PnL chart.
 
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Quanto said:
I've extended my "ExtendedCollar" construct and dubbed the resulting new construct "SuperCollar".
It consist of LS + SC + LP + SP (or said differently: CC + LP + SP).
They both are intended for options with high ATM IV (for the SC and SP legs, whereas the LP leg prefers low IV).

https://optioncreator.com/stf2fnf
View attachment 329956
More...

Wait, so it's a 2x short put (one of which is synthetic) and 3x long put. AKA, 2x3 ratio spread. What do you think is so magical about it?
 
Slow Learning Elf said:
Wait, so it's a 2x short put (one of which is synthetic) and 3x long put. AKA, 2x3 ratio spread. What do you think is so magical about it?
More...
Its PnL diagram, what else! :)
And that it does not require a MarginAcct.
And: LP.Q is not fix, it 'finally' is usually >= 3, I have even 25 :-), just depends on own desire of the PnL chart...

Just show me where this construct was used before.
I at least gave it a name: "Super Collar" :)
 
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