ShareLord's strategy - Collared Call aka Hedge Wrapper

Note:  The reason why I read up about this strategy is because I watched a Youtube video about what Sharelord does.  I thought that there is no need to reinvent the wheel if someone is teaching it.  Thus, the first strategy I tried to read up about is this.  

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Name: Collared Call aka Hedge wrapper

Strategy type:  Protective
Outcome:  Prevents extreme losses but also limits extreme gains

Timing:  After the stocks you own has made substantial gains

How it works:
1.  You need to own the stock (pre-requisite)
2.  You need to BUY out-of-money PUT options (insures against falling px)
3.  You need to SELL out-of-money CALL options (locks in some profit and makes some income)

Profit-Loss hack:  The stock is dividend paying and you do 2 and 3 after dividend is paid. 

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• 1 + 2 = Protective PUT (aka Married Put)
• 1 + 3 = Covered CALL (aka Covered Call)

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Calculations:

• Profit = CALL strike price -  stock purchase price + CALL income - PUT insurance - all commission
• Loss =  PUT strike price - stock purchase price + CALL income - PUT insurance - all commission

Video information available:

• TradersExclusive (best) @ https://www.youtube.com/watch?v=NI2pTBdMJLY
• Schaeffers (simple) @ https://www.youtube.com/watch?v=jj2KIIbT93
• TradeKing (good details) @ https://www.youtube.com/watch?v=7jhBGQb8A5M
• Sharelord @  www.youtube.com/watch?v=vwA489rpigo

For a more profitable variation, read

• http://www.nasdaq.com/article/a-dynamic-twist-on-the-collar-trade-cm119124