When we add a protective put to a covered-call trade, we now have a collar trade, explains Alan Ellman of The Blue Collar Investor.

There are three legs to this trade: long stock, short call (the ceiling) and long put (the floor). Since we pay for the protective put insurance, our returns will suffer. This podcast evaluates the impact of selling a put to help fund the protective put. Pros and cons are analyzed using Nvidia Corp. (NVDA).

Learn more about Alan Ellman on the Blue Collar Investor Website.