This episode of Trader’s Workshop is a genuinely excellent, patiently paced walkthrough of the collar trade, one of the older and more foundational options strategies, built entirely around a live example on Micron that makes an often-confusing concept click in a way a purely theoretical explanation rarely does. Mark opens by explaining why collars are having a moment again, pointing to three converging factors, higher interest rates making the forward-pricing component of a collar more meaningful, a wave of tech employees holding concentrated RSU and stock compensation positions who need exactly this kind of protection, and a cluster of persistently high-volatility names, especially in semiconductors, where collar economics are unusually favorable right now.
The most valuable stretch of the episode is Mark’s explanation of why higher implied volatility actually skews a zero-cost collar’s strikes so dramatically in the buyer’s favor, letting a trader reach for a much higher call strike on the upside relative to how far out of the money the protective put sits on the downside. He walks through the underlying reason step by step, that volatility lives in log space, stock prices are floored at zero on the downside but can theoretically run to infinity on the upside, and that asymmetry in the distribution itself, not just the raw volatility number, is what pushes a zero-cost collar’s upside window so much wider than its downside floor, especially the longer the time horizon stretches out.
Watching Mark and Lex actually build this on the Tradier platform live is where the lesson really lands. On a 30-day Micron collar, they land on a put roughly $100 out of the money paired with a call around $140 out of the money for a small net credit, already a meaningfully asymmetric setup. But the real payoff comes when they stretch the same exercise out to roughly 400 days, where a $150-out-of-the-money put on the downside pairs with a call over $500 out of the money on the upside for zero cost, a three-and-a-half-to-one ratio that Lex openly calls insane once he sees the actual numbers on screen. It’s a genuinely striking demonstration of how much time and volatility can bend a collar’s risk-reward profile in a bullish trader’s favor.
The episode’s back half turns practical, covering how to actually manage a collar once it’s on, and the guidance here is refreshingly grounded rather than dogmatic. Mark’s rule of thumb is to think of a long-dated collar like an ocean liner drifting for its first several months, not something to fiddle with unless conditions change dramatically, and to reserve active adjustment for the final quarter of the trade’s life as expiration approaches and the position needs to come in for a landing. Both hosts agree that a collar getting adjusted on a weekly basis is usually a sign the wrong strategy was chosen in the first place, since collars are fundamentally a set-it-and-let-it-run tool rather than a short-term tactical one.
For anyone holding a concentrated stock position, whether from employer equity compensation or a long-term conviction bet, and wondering how to protect it without giving up too much upside, this episode is close to a complete education on the collar trade in under thirty minutes, covering the mechanics, the volatility math behind why it works so well right now, and the discipline needed to manage one without over-trading it.
About Trader’s Workshop / The Brew
Trader’s Workshop is a recurring segment within The Brew on Tradier Hub where Lex, Mark, and Jason engage with audience questions and work through live market setups including major earnings events.
