🌰 Seed
Collar cost drag versus just eating bad months
💬 Creator's note:
Ran the protective collar through the wringer this time, asking where the long put's theta drag eats the short call credit in a flat, low-vol year and whether that breakeven ever really favors the hedge over just going narrower on the call delta. No tidy answer, which is about what I expected from insurance, but the reasoning on the theta-versus-credit tug of war was worth the read.