Worksheet:

Your Turn
Section 9: Protective Collar Combination

Amazon.com Inc. (AMZN) has recently come under

pressure after reports hit the tape that The White House
may be interested in taking action against the company.
You have a nice gain in your AMZN shares so you decide
to make a protective move by opening a collar over the
next month.
 Protective Collar Combination
Stock: AMZN, *Long 100 shares of AMZN at 1200

Date: 4/6/18

Stock Price: 1405.23

S e l l 1 A M Z N M AY 1 4 5 0 C a l l a t 6 0 . 6 0

B u y 1 A M Z N M AY 1 3 5 0 P u t f o r 5 4 . 6 0

Fo r m u l a s

Max Profit if Call Strike - Stock Purchase Price -

Net Debit Net Premium Paid
Max Profit if Call Strike - Stock Purchase Price +
Net Credit Net Premium Collected

Max Loss if Put Strike - Stock Purchase Price -

Net Debit Net Premium Paid

Max Loss if Put Strike - Stock Purchase Price + Net

Net Credit Premium Collected

Breakeven if Net Stock Purchase Price - Net Premium

Credit Collected

Breakeven if Net Stock Purchase Price + Net Premium

Debit Paid
 Protective Collar Combination
Stock: AMZN, *Long 100 shares of AMZN at 1200

Date: 4/6/18

Stock Price: 1405.23

S e l l 1 A M Z N M AY 1 4 5 0 C a l l a t 6 0 . 6 0

B u y 1 A M Z N M AY 1 3 5 0 P u t f o r 5 4 . 6 0

Calculate the Formulas

Max Loss

Max Gain

Breakeven

AMZN Price
at Expiry

Net Result