Why Lord Shiva wears Snake around his Neck:

There are significant reasons why Lord Shiva wears snake around his neck as every one knows this but there are many reasons why snake (Naga) around his neck wearing like ornaments and the snake which he wears is called Vasuki snake (Naga) king of serpents and this is the same snake which is used in churning of the ocean called Samudra Manthan which is narrated in Bhagavata purana and in the vishnupurana which explains about the origin of Amrita which is the liquid of immortality.

Snake on the body of Shiva around his neck:

Serpent is the Jiva or the individual soul which rests upon Siva, the Paramatman or the Supreme Soul. The five hoods mean the five senses or the five Tattvas namely, earth, water, fire, air and ether and Lord Shiva wears snake around his neck also represent the five Pranas, which hiss in the body like the serpent. The inhalation and exhalation are like the hissing of the serpent. Lord Siva Himself became the five Tanmatras, the five Jnanendriyas, the five Karmendriyas and other groups of five. The individual soul enjoys the worldly objects through these Tattvas. When the individual attains knowledge through control of the senses and the mind, he finds his eternal resting abode in Lord Siva, the Supreme Soul. This is the mysterious significance of Lord Siva wearing the snake on His body.

Lord Siva is absolutely fearless. Srutis declare, “This Brahman is fearless (Abhayam), Immortal (Amritam).” Worldly people are afraid even at the very sight of a snake but Lord Siva is wearing serpents as ornaments on His body. This indicates that Lord Siva is absolutely fearless and immortal.

Generally serpents live for hundreds of years. Wearing of serpents by Lord Siva signifies that He is Eternal and it is also signifies that once an ego is controlled once can be wear as ornament.

Snakes are considered evil and demonical, thus by wearing a snake around his neck Shiva guarantees that no evil can touch or destroy his followers.