you sell a call, buy a call. you get less for the sell piece than what you spend the buy piece ... wouldn't call that leverage. just a negative investment position. you need not necessarily borrow.
jbaphna Wrote:
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> With a collar you hold the underlier plus a bull
> spread hence no leverage. A bull spread standalone
> does use leverage. Agree?
I thought a collar was a protective put + covered call
There is also a concept of 'no cost collar' or 'zero cost collar', where the two options entered into have exactly the same premium and hence net to zero. Note that when doing this, you do not have full control of where the strikes are as you are constrained to finding two options with same/similar premiums.