Buy a put below spot to set a floor, sell a call above it to pay for the put. Structure it so the premiums roughly offset and the hedge costs almost nothing in cash. That is a collar, and it is a genuinely useful tool for anyone holding a coin they do not want to sell.
What it actually costs
The upside above the call strike. In a market that can move a long way quickly, that is not a theoretical concession — it is the specific outcome most holders are there for.
“Zero-cost” describes the cash flow at inception and nothing else. The real price is contingent and it is charged precisely in the scenario you were hoping for, which is why the structure feels free right up until it is not.
Why the crypto version is asymmetric
In a call-heavy book calls are relatively well bid, so the call you sell funds more of the put than the equity intuition suggests. That means either a cheaper collar or a higher call strike for the same cost — a genuine improvement on the equity version.
It cuts both ways though. If the regime is one where calls are richly bid because the market is running, the strike you can afford to sell is exactly the one most likely to be reached.
Sizing it as a floor, not a trade
The put strike is the decision that matters, because it defines the loss you have chosen to accept — the same discipline as sizing from the level rather than the multiple in liquidation price and leverage.
Choosing it by what makes the structure cost zero is backwards: it lets the option market set your risk tolerance. Choose the floor you actually want, then find out what it costs, then decide.
The horizon question
Both legs expire, so a collar protects a defined window and then stops. With daily, weekly, monthly and quarterly expiries available, that window can be matched to the actual concern — and rolling it repeatedly is a different, more expensive posture than putting one on for a known event.