6:15 AM, May 14. I was standing in my bathroom brushing my teeth with my left hand and holding my phone in my right, looking at a red candle that had formed overnight in after-hours trading. The stock was down 6 percent before the market even opened. On the counter next to the sink sat a signed purchase agreement for a house at $615,000, with a $128,000 down payment due in exactly five months. I had not slept. The toothbrush fell outta my mouth.
Because here was the problem, in one ugly sentence: my entire down payment lived in 1,100 shares of a single company, the one now gapping down. Five months. No room for a drawdown. Every financial planner on earth says never let a house deadline ride on one ticker. I had done exactly that for three years while the position tripled, telling myself I'd sell "soon."
The twist that morning was an email I almost deleted. My old investment advisor, the one I'd stopped paying two years earlier cuz I figured I knew better, had sent a two-line note: "Saw the house news. Call me about a collar before you sell anything." I called him at 7:02 AM. He picked up on the second ring, which told me he'd been waiting.
what a collar actually is, minus the lecture
He detailed it in ninety seconds. Buy a put at a price you can live with, that guarantees you a floor. Sell a call at a price you can part with, and use that cash to pay for the put. you've capped your world on both sides. Ceiling and floor. For a guy with a date circled on a calendar, that trade is less about markets and more about sleeping. I asked him twice whether this was some exotic instrument he was earning a markup on. He said a collar is two plain options and a boring intent, and the only exotic thing in my life was my own position sizing.
the exact numbers on the trade ticket
We snagged September puts with a strike of $147 for $3.10 a share. We sold calls with a strike of $186 and collected $2.20. Net cost: $0.90 per share, about $990 plus fees on 1,100 shares. Wait, the headline number: total all-in with a second roll later in the summer came to $4,100. That was the entire cost of certainty. Less than one percent of the position.
the stock kept falling, which was the point
June was a bloodbath. The shares slid from $172 to $141 over six weeks. Every dollar below $147 would have been down-payment money evaporating. The put sat there like a concrete slab under the position. My floor held. The down payment number never moved. I began sleeping again around the time the stock hit $150, which is not a coincidence.
the ceiling I agreed to, and didn't hate
The stock never got near $186, so the calls I sold expired worthless. In some alternate July, the stock rips to $210 and I watch $26,000 of upside walk past me. I've made peace with it. Insurance you never use still did its job the day you snagged it. The advisor's fee for structuring this was $850. I paid it the same hour. People ask whether paying someone $850 to place two option orders stings. Less than watching a down payment bleed out on a bathroom screen, which I had recently sampled at full price.
what my credit score had to do with any of this
Separate panic, same season: I froze every other account to make sure no cash got touched, including the card I'd held since college. A dormant card closed for inactivity and my utilization spiked on another card, and my credit score dropped 31 points right before the lender's final pull. The mortgage officer flagged it. I had to write a letter explaining a credit card, while juggling options expiration. Keep every account open when a mortgage is coming. Learn it from me, cheaply.
settlement day, October 3
The puts paid off exactly as designed. I exercised, sold all 1,100 shares at the $147 floor, and wired $128,000 to escrow plus closing costs. The house closed October 31. Total damage from the collar across both rolls: $4,100. Total loss avoided from the June slide: about $27,000 against where the position would have sat unprotected.
would I do it again, honestly
Without hesitation, and I'd do it earlier. The mistake was not the collar. The mistake was three years of letting a deadline and a lottery ticket share a wallet. If your money has a job with a start date, it stops being an investment and becomes a liability you manage.
I still brush my teeth looking at my phone, a habit I can't seem to kill. But the bathroom counter in the new house holds nothing but soap. The purchase agreement that sat there on May 14 is framed in the hallway now, next to a photo of the closing table. $4,100 snagged the floor I stood on that whole summer. Cheapest concrete I ever poured.
