Implyng that one should always buy or sell a higher of lower strike is highly inaccurate. I actually passed the Series 4 (Options Principal Exam) many, many years ago. I had to supervise the tradeturds like you that kept making untrue statements. One should also assume that they could be extremely wrong when placing a trade. Giving options advise is quite reckless and stupid and listening is just as bad.
Again, a collar trade greatly limits the upside of a stock. Kind of like the upside you missed on AUQ from $6 to $8. Writing the $6.50 call and buying the $5.50 put when the stock was at $6 would have limited your upside to 50 cents instead of $2. Sounds like a bad way to come home from a vacation.
I would be calling your boss if you cost me that upside and I didn't fully understand. Just passing along 25 years of advice.
You are talking with my boss. Why don't you do the math on the ROI, for an example, if I make 8% in two weeks with a collar trade. How much will I have at the end of the year? The gowth of the money is made exponentially from the original investment. I can make double my investment each year. How about you?
By the way, the collar trade is the starting point from which a trade can start. From there you can adjust the options trades into other trades from there. ie bull call, bear call, bull put, bear put. At anytime you can unwind the trade to take profit off of the table.
Your statement is way out in left field. You don't even know what a collar trade is. It's also called a vacation trade. You set this trade up and you go on vacation and when you come home your vacation has been paid for. All you are doing is trading between the spread of two well placed options. You will be protecting your loses from the downside and caping the profits with the sell of an option. Why don't you look it up before you open your mouth and look foolish.