Let’s say I own a stock and think it will go down in value. So I buy a PUT contract and sell CALL options. That’s an example “collar” right? Does a collar have to necessarily be a bearish play?
What would you call it if you own a stock and think it will go up, so you buy the CALLS and sell the puts? Would it still be considered a collar?
A collar is equivalent to a bull call spread: a short call at a high strike price and a long call at a low strike price.
The opposite is a bear put spread: a short put at a low strike price and a long put at a high strike price.
(Note that in neither of these do you own the underlying.)
You can amuse yourself by using put-call parity to create a collar (including the underlying) that is equivalent to a bear put spread.