LLY trade example

Based on how I look at the chart, this trade triggered on 1/2/24. Looking at the chart we can see that the stock had a nice slow pullback and consolidation from the prior highs. After balancing for two days, it made a move on 1/2.

For this collar trade, the stock was purchased around $590.70. Then the 2/16 590 put strike was bought and the 2/16 600 call strike was sold for a net debit of $1.10. The breakeven price for the entire trade is $591.80.

Looking at the PnL chart, the max risk is $180 while the max reward is $820. If the stock stays above $600, then the max profit will be realized. Adjustments to this trade will likely be made towards the end of January. Other credit spreads could be introduced to lower the overall risk.