Ray Dalio is holding 5,000 shares of stock at $45 per share. The stocks price might drop, so Ray Dalio is concerned. Ray Dalio is thinking about a collar as a hedge. January 2021 call options with a strike of $50 are quoted at a cost of $2, and January 2021 puts with a $40 exercise price are quoted at a cost of $3. If Ray Dalio establishes the collar and the stock price winds up at $35 in January 2021, Ray Dalio's net position value including the option profit or loss and the stock is Hint: Apply the profit formula for the collar. Check which legs of the collar are in the money. Don't forget that the stock also drops so you register a loss for the stock. After you calculate the profit/loss on the collar, you can apply that to the original price of the stock per share and multiply by 5,000. It is easier to operate in the per-share amounts first. $175,000 $220,000 $195.000 $215,000