The investor adds a collar to an existing long stock position as a temporary, slightly less-than-complete hedge against the effects of a possible near-term decline.
This strategy consists of writing a call that is covered by an equivalent long stock position.
This strategy profits if the underlying stock moves up to, but not above, the strike price of the short calls.
The initial cost to initiate this strategy is rather low, and may even earn a credit, but the downside potential is substantial.
This strategy consists of adding a long put position to a long stock position.