Collar Advances differ from margin loans in several important ways:
No Margin Calls: The collar structure eliminates the risk of margin calls if your stock drops. You won't be forced to sell at unfavorable times or post additional collateral.
Defined Risk: Your maximum loss is limited to the floor (typically 20%), whereas margin loans expose you to unlimited downside.
Competitive Rates: Collar Advance rates (3.7-4.2%) are often lower than margin rates (SOFR + 2-6%), though rates are market-dependent.
Fixed Terms: Your rate and terms are locked for the duration, providing certainty versus variable margin rates.