Collar

The vault writes a call and buys a put on your shares, capping both upside and downside.

A collar wraps a share in two options: a written call above the price and a bought put below it. The call's premium helps pay for the put. The result is a band: your gains are capped at the call strike and your losses are floored at the put strike.

Payoff at expiry of one share, one written call and one bought put. Flat floor, flat ceiling.

Share + written call + bought putShare alone

Payoff shape at expiry · not to scale

What the vault does#

Holds your tokenized shares. In Vanterra's collateral model the share backs the collar, and the put funds the floor.
Writes a call and buys a put, capping both the upside and the downside.
Chooses both strikes and expiries from on-chain rules published per vault, fixed for each epoch.

When a collar fits#

You want to keep holding a stock but limit how much a bad week can cost.
You accept a cap on gains in exchange for that floor.

The protected floor is also what an options-backed credit line is sized against.