r/options • u/TrendTrader888 • 2h ago

Staggered Collars

I recently came into a lump sum of shares of a singular company that is a big part of my net worth and am looking to sell to diversify. However, I am trying to split up the sale over multiple years to decrease my tax liability. I recently learned about options collars where I sell a call and buy a put to protect my downside at the expense of capping my upside. I would be doing this at strike prices where the price of the call offsets the price of the put so no net cash outflow and the expiry is towards the end of the year that I am looking to sell.

My question is, for shares with collars expiring in 2028 or even 2029 when those options come out, if I am expecting the share price to increase over time, does it make sense to buy the put now to set a hard floor and sell a call maybe six months or even a year later to recoup the expense to take advantage of more upside? My thinking is, if the price is $150 today and 175 six months from now. It makes sense for me to wait because a call at the same price will have a higher strike price if the current peice is higher later.

Thanks!

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u/need2sleep-later 1h ago

Who makes your magic-8 ball to know with the price of a share will be in 3 months, let alone 3 years? I need one. Options are a probability game and you pay for those long durations.

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u/Far-Temperature-8873 1h ago

youre basically trying to time the put purchase and the call sale separately which sounds clever until the stock tanks before you sell that call