Selling a Collar on Circle — How I Protect Gains Without Giving Up the Upside

I want to introduce you to a strategy I use a lot, especially at moments like this when a stock has had a massive recovery and I'm thinking: How do I protect what I've got without walking away from the trade?

Let's say I own Circle (CRCL) — maybe through a synthetic long or modified synthetic long that got assigned — and my cost basis is $120. This stock fell all the way to $50 and has fought its way back to $102. I'm not quite at breakeven yet, but I'm close.

Here's the dilemma: I want a chance to get back to breakeven (or better), but I absolutely do not want to ride this thing back down to $50. That feeling of watching your gains evaporate? I remember it. It wasn't fun.

So what can I do? It's called a collar, and it's one of the most elegant ways to define your risk while keeping real upside on the table.

First, let me tell you why I'm looking at this today. The chart is showing a +2.74 mean reversion with sell divergence. That means price is making higher highs, but mean reversion is getting weaker — a sign that momentum might be fading. Plus, there's significant resistance at the $150 level from a head-and-shoulders pattern (left shoulder, head, right shoulder).

I don't know if this stock is going to roll over. But I have a roadmap that shows me the probabilities, and I want to act on it.

Here's the collar I'm pricing out:

• Sell the June $150 call — that's my cap on the upside, and I chose $150 because it's right at a prior resistance level, it’s significantly out of the money, and I still want to make a large profit should CRCL keep running.  

• Buy the June $85 put — that's my floor, funded by the premium from the call

• Combined debit: ~$3 

What does this do for my portfolio?