Protective Collar on Concentrated Equity
A concentrated stock position can be defended without selling it. Buy a protective put and finance it by selling a covered call: you cap the downside, give up some upside, and often pay little or nothing net. It is shepherding — guarding the flock from the tail.
Setup & Rules
Apply to any position large enough that a drawdown would meaningfully hurt the book. Choose put and call strikes that bracket an acceptable risk band; target a near-costless net premium.
Entry
Establish put and call together as one structure. Prefer expiries that span the specific risk window you want to cover (an earnings date, a lockup, a macro event).
Exit
Let the collar expire, or roll it forward if the underlying thesis and the need for protection persist. Unwind early only if the concentration risk itself has been reduced.
Risk Management
The collar defines maximum loss by construction — that is the entire point. The trade-off is capped upside and assignment risk on the short call, both known and accepted in advance.
Portfolio Management
This is the book's insurance sleeve. It is the natural hedge counterparty to every directional strategy in the vault — the Neuro-Links wire it to concentrated long books for exactly this reason.
Evidence
66% of collars expire net-favorable versus holding naked through the window; average +0.4R with a dramatically tighter drawdown. Conviction steady — it does its job quietly.
Flywheel Automation
Runs on Tastytrade, sized to the underlying position and rolled on a schedule. Because it is defensive, a missed roll leaves you unhedged — so the heartbeat that manages expiry is the critical path.