JPM's Collar Strategy: Containing SPY Below $5900 for Strategic Edge
JPM collar at $5900 if this completely breakouts here I have target for $597+ for $SPDR S&P 500 ETF Trust(SPY)$ , but you can see JPM has everyone reason to keep this SHORT call on and price below on it.
Purpose of the JPM Collar Strategy:
Downside Protection:
The primary purpose is to limit losses on a stock or portfolio. It protects against large downward moves by buying a put option.
Income Generation / Cost Offset:
It sells a call option to help offset the cost of the protective put. This sacrifices some upside potential.
Tax Efficiency:
Wealthy clients may use this to hedge large unrealized gains without triggering a taxable event from selling the stock.
Maintaining Exposure:
It allows investors to retain ownership of the underlying stock and its dividends, rather than exiting the position entirely.
Volatility Management:
The structure helps smooth out returns and reduce volatility, especially during uncertain markets.
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