1

collar

noun col·lar \ ˈkä-lər \
Updated on: 22 Nov 2017

Definition of collar

1 : a band, strip, or chain worn around the neck: such as
a : a band that serves to finish or decorate the neckline of a garment
b : a short necklace
c : a band placed about the neck of an animal
d : a part of the harness of draft animals fitted over the shoulders and taking strain when a load is drawn
e : an indication of control : a token of subservience
f : a protective or supportive device (such as a brace or cast) worn around the neck
2 : something resembling a collar in shape or use (such as a ring or round flange to restrain motion or hold something in place)
3 : any of various animal structures or markings similar to a collar
4 : an act of collaring : arrest, capture

collared

play \ˈkä-lərd\ adjective

collarless

play \ˈkä-lər-ləs\ adjective

Examples of collar in a Sentence

  1. He wore a shirt with a tight-fitting collar.

  2. She grabbed me by the collar.

  3. I bought a new collar for the dog.

Recent Examples of collar from the Web

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'collar.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

Origin and Etymology of collar

Middle English coler, from Anglo-French, from Latin collare, from collum neck; akin to Old English heals neck, and probably to Old English hwēol wheel — more at wheel

collar Synonyms

Synonyms
choker, necklace, dog collar, lei
Antonyms
discharge
Related Words
torque (or torc); beads, carcanet [archaic], rivière; rope, strand; bangle, lavaliere (also lavalliere), locket, pendant (also pendent)
Near Antonyms
emancipation, liberation, release

2

collar

verb

Definition of collar

transitive verb
1 a : to seize by the collar or neck
b : arrest, grab
c : to get control of : preempt
  • we can collar nearly the whole of this market
  • —Roald Dahl
d : to stop and detain in unwilling conversation
  • collar the guest of honor
2 : to put a collar on
  • collar a dog

Examples of collar in a Sentence

  1. The police collared the guy a few blocks from the scene.

  2. He collared me on my way out the door.

Recent Examples of collar from the Web

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'collar.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of collar

1613


Financial Definition of COLLAR

collar

What It Is

A collar option strategy, also known as a "hedge wrapper," is used to lock in the maximum gain and maximum loss of a stock. To execute a collar, an investor buys a stock and an out-of-the-money put option while simultaneously selling an out-of-the-money call option.

How It Works

In a collar, the investor has a long position in a stock, so he benefits when the shares increase in price.  To implement a successful collar strategy, the strike price for the call he's selling needs to be above that of the put he's buying. Both options should also have the same expiration date.

For example, say you own 100 shares of Company XYZ at $45. To implement a proper collar, you buy a put with a strike price of $43 and sell a call with a strike price of $47. The expiration date on both options is the same.

If XYZ rises above $47, the buyer of the call will exercise his option, and you must sell him 100 shares of XYZ at $47, even if shares are selling for more than that in the market. Regardless of how high the price goes, you make a $2 profit.

If Company XYZ falls below $43, then you only lose $2 a share, because you have the right to sell 100 shares of XYZ at $43, even if they are trading below that price.

If XYZ is trading between $43 and $47 when the expiration date arrives, the options expire worthless, and you keep your shares at the current market value.

Note that the collar ensures you can't lose or make more than $2 on the trade no matter how high XYZ rises or how low it falls. You have a stop on the upside, but you also have a stop on the downside.

Why It Matters

The primary benefit of a collar option is to limit downside risk. Collars also limit profits on the upside, which is why they are most frequently used during down markets.

Collars are a conservative strategy and are generally implemented to protect profits, not generate them. Investors need to always be assessing the risk/reward ratio of every position they're considering. Fortunately, the risk/reward scenario for collars is clear: It's low risk, low reward.

On the other hand, if your threshold for risk is low, collars are a fine way to protect your portfolio from the unexpected.

[Learn more about collar option strategies in the InvestingAnswers feature: Add Protection Against a Market Downturn With Collar Options.]



COLLAR Defined for English Language Learners

collar

noun

Definition of collar for English Language Learners

  • : a part of a piece of clothing that fits around a person's neck and is usually folded down

  • : a band of leather, plastic, etc., worn around an animal's neck

  • : a ring or band used to hold something (such as a pipe or a part of a machine) in place


collar

verb

Definition of collar for English Language Learners

  • : to catch or arrest (someone)

  • : to stop (someone) in order to talk : to force (someone) to have a conversation


COLLAR Defined for Kids

1

collar

noun col·lar \ ˈkä-lər \

Definition of collar for Students

1 : the part of a piece of clothing that fits around a person's neck
2 : a band of material worn around an animal's neck
3 : a ring used to hold something (as a pipe) in place

collarless

\-ləs\ adjective

2

collar

verb

Definition of collar for Students

collared; collaring
: to seize by or as if by the collar : capture, grab

Medical Dictionary

collar

noun col·lar \ ˈkäl-ər \

medical Definition of collar

: a protective or supporting device (such as a brace or cast) worn around the neck


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