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You received stock options that you recently exercised. You cannot legally sell the stock for the next six months. The stock is selling for $38.25.
You received stock options that you recently exercised. You cannot legally sell the stock for the next six months. The stock is selling for $38.25. A call to buy stock at $40 is $3.38 and a put to sell the stock at $35 is $1.94. How could you use a collar to reduce your risk of loss from a decline in the price of the stock? Verify that the collar does achieve its objective Stock S Profit Call Put Net Profit $50 45 40 38.25 $0 $3.38 -$1.94 $1.44 35
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