A Collar is a position of three options contracts that protects a stock portfolio from a large drop and pays for itself, so the holder pays little or no net premium. The best-known example in the US market is the collars in JPMorgan's hedged equity funds on the S&P 500, the largest being the JHEQX fund.
Three contracts in one position
- Protection: a bought Put about 5% below the price, which offsets the decline beyond that level.
- Far put: a sold put about 20% below the price. It funds part of the protection and caps it in a very sharp drop.
- Cap: a sold Call about 4 to 6% above the price. Its premium completes the funding, so the cost is close to zero.
The percentages come from the close on the setting date and are taken from the fund's earlier official collars in its quarterly filings with the US Securities and Exchange Commission.
Why does it matter near quarter-end?
The collar is set once each quarter and reset (the roll) on its expiration day, the last trading day of the quarter. On the other side of these strikes sit contracts in the tens of thousands held by market makers, and their hedging concentrates as expiration nears. Near the cap strike, for example, a market maker sells as the price rises and buys as it falls, so the level can seem to pull the price for days, and the effect disappears with the roll.
How to read it without overstating
- It describes where a large, disclosed hedge sits. It is not a forecast of market direction.
- Its effect is limited in time: it concentrates in the last ten days before expiration, and outside that window it isn't read day to day.
- Read it as part of the full Gamma structure, not alone: on most days the walls of the whole market are bigger than any one fund.
Below are the current collars with today's numbers, as read from fund disclosures and open interest. The table updates each trading morning and after the close.
Current collars with today's numbers
| Fund | Expiration | Capsold call | Protectionbought put | Far putsold put | Contractslatest disclosure |
|---|---|---|---|---|---|
| JHQDXHedged Equity 2 | 30 October 2026 in 17 days | 7,900Open interest | 7,100Open interest | 6,000Open interest | 7,542 |
| JHQTXHedged Equity 3 | 30 November 2026 in 48 days | 8,030–8,110Fund base | 7,250Open interest | 6,135Fund base | 4,145 |
| JHEQXHedged Equity | 31 December 2026 in 79 days | 8,040Open interest | 7,250Open interest | 6,110Fund base | 27,069 |
Positioning reminder: on the other side of these strikes sit contracts in the thousands held by market makers. Their hedging concentrates near the expiration date, then disappears when the collar is reset on expiration day itself (the roll).
Note: the effect is mechanical, from proximity to expiration and position size. It is not a view on market direction.
Fund disclosure: Form N-PORT filed with the US Securities and Exchange Commission (the latest covers 30 June 2026, published 28 August 2026) · Fund base: the current collar is struck after the last published disclosure, so it is estimated from the setting-day close using the ratios of the fund's earlier official collars, and the cap is a range because it is set at no cost · Open interest: a strike within the estimated range with contracts close to the fund's size.
