Protective Collar Option Strategy

Instructions

Protective Collar options trading strategies are available in the Strategy Builder of the Option Chain. This options trading strategy provides a way for clients to protect an existing position from losses below a certain amount at the cost of capping upside. To utilize this tool, please take the steps outlined below.

  1. For Mosaic - Click the New Window button in the top left corner and select Option Chain

    For Classic TWS - Click the Trading Tools button across the top of the page and select Option Chain

  2. Enter an underlying in the top left corner of the Option Chain window and press Enter.

  3. The Option Chain for this product will appear.

  4. Toggle the Strategy Builder on in the bottom left corner.

    Toggle Strategy Builder On in TWS

  5. In the top right corner of the Strategy Builder, select the Strategies drop-down menu. Select the Protective Collar strategy.

    Select Strategy in Strategy Builder of TWS

  6. Select the legs from the Option Chain to apply the Protective Collar Option Strategy.

    Add a Leg for Protective Collar Option Strategy in TWS

  7. The order ticket will populate below the Option Chain. Make modifications as needed and click Submit Order.

    Order Ticket for Protective Collar Option Strategy in TWS

  8. An additional order preview will populate. Review the order and select Override and Transmit to place the order.

    Place order for Protective Collar Option Strategy in TWS

  9. Navigate to your Portfolio to view this position.

  10. Click on the collar position to expand and view legs.

 

Additional Resources