How are PJP collar max profit and max loss calculated?

Max profit roughly equals short-call strike minus cost basis plus net premium; max loss roughly equals cost basis minus long-put strike minus net premium. Breakeven shifts by the net premium. For the PJP collar priced from the end-of-day chain at a 30-day expiry (ATM IV 21.90%), the computed maximum profit is $569.00 per contract and the computed maximum loss is -$431.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a PJP collar?

The breakeven for the PJP collar priced on this page is roughly $105.31 at expiration, derived from end-of-day chain premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The current PJP market-implied 1-standard-deviation expected move is approximately 6.28%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current PJP implied volatility affect this collar?

PJP ATM IV is at 21.90% with IV rank near 19.48%, which is on the low end of its 1-year range. Premium-buying structures (long call, long put, debit spreads) are relatively cheap in this regime; premium-selling structures collect less credit per unit risk.

PJP Collar Strategy

PJP (Invesco Pharmaceuticals ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.

The Invesco Pharmaceuticals ETF (Fund) is based on the Dynamic Pharmaceutical Intellidex Index (Index). The Fund will normally invest at least 90% of its total assets in common stocks that comprise the Index. The Index is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including: price momentum, earnings momentum, quality, management action, and value. The Index is comprised of common stocks of 30 US pharmaceuticals companies. These are companies that are principally engaged in the research, development, manufacture, sale or distribution of pharmaceuticals and drugs of all types. The Fund and the Index are rebalanced and reconstituted quarterly in February, May, August and November.

PJP (Invesco Pharmaceuticals ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $339.5M, a beta of 0.51 versus the broader market, a 52-week range of 77.89-110.81, average daily share volume of 27K, a public-listing history dating back to 2005. These structural characteristics shape how PJP etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.51 indicates PJP has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. PJP pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a collar on PJP?

A collar pairs long stock with a protective out-of-the-money put financed by a short out-of-the-money call, capping both tails of the position around the current spot.

Current PJP snapshot

As of May 15, 2026, spot at $105.81, ATM IV 21.90%, IV rank 19.48%, expected move 6.28%. The collar on PJP below is built from the same end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 34-day expiry.

Why this collar structure on PJP specifically: IV regime affects collar pricing on both sides; compressed PJP IV at 21.90% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 6.28% (roughly $6.64 on the underlying). The 34-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated PJP expiries trade a higher absolute premium for lower per-day decay. Position sizing on PJP should anchor to the underlying notional of $105.81 per share and to the trader's directional view on PJP etf.

PJP collar setup

The PJP collar below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With PJP near $105.81, the first option leg uses a $111.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PJP chain at a 34-day expiry; the cross-strike IV skew is reflected directly in the per-leg values rather than approximated. Quantity sizing assumes one contract per option leg (or 100 PJP shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$105.81	long
Sell 1	Call	$111.00	$1.52
Buy 1	Put	$101.00	$1.02

PJP collar risk and reward

Net Premium / Debit: -$10,531.00
Max Profit (per contract): $569.00
Max Loss (per contract): -$431.00
Breakeven(s): $105.31
Risk / Reward Ratio: 1.320

Max profit roughly equals short-call strike minus cost basis plus net premium; max loss roughly equals cost basis minus long-put strike minus net premium. Breakeven shifts by the net premium.

PJP collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on PJP. Each row is one sampled price point from the computed payoff curve; the full curve uses 200 price points internally before being summarized into 10 rows here.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$431.00
$23.40	-77.9%	-$431.00
$46.80	-55.8%	-$431.00
$70.19	-33.7%	-$431.00
$93.59	-11.6%	-$431.00
$116.98	+10.6%	+$569.00
$140.37	+32.7%	+$569.00
$163.77	+54.8%	+$569.00
$187.16	+76.9%	+$569.00
$210.56	+99.0%	+$569.00

When traders use collar on PJP

Collars on PJP hedge an existing long PJP etf position; the long put sets a floor while the short call finances it, often run as a near-zero-cost hedge during expected volatility windows.

PJP thesis for this collar

The market-implied 1-standard-deviation range for PJP extends from approximately $99.17 on the downside to $112.45 on the upside. A PJP collar hedges an existing long PJP position with a protective put while financing the put cost via a short call; when the premiums roughly offset, the collar acts as a near-zero-cost insurance band around the current spot. Current PJP IV rank near 19.48% sits in the lower third of its 1-year distribution, where IV often re-expands toward the mean; this favors premium-buying structures and disadvantages premium-selling structures on PJP at 21.90%. As a Financial Services name, PJP options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PJP-specific events.

PJP collar positions are structurally neutral (protective); the modeled P&L assumes European-style exercise at expiration and ignores early assignment, transaction costs, dividends paid before expiry on the stock leg (when present), and the bid-ask spread on the listed chain. PJP positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PJP alongside the broader basket even when PJP-specific fundamentals are unchanged. Always rebuild the position from current PJP chain quotes before placing a trade.

Frequently asked questions

What is a collar on PJP?: A collar on PJP is the collar strategy applied to PJP (etf). The strategy is structurally neutral (protective): A collar pairs long stock with a protective out-of-the-money put financed by a short out-of-the-money call, capping both tails of the position around the current spot. With PJP etf trading near $105.81, the strikes shown on this page are snapped to the nearest listed PJP chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are PJP collar max profit and max loss calculated?: Max profit roughly equals short-call strike minus cost basis plus net premium; max loss roughly equals cost basis minus long-put strike minus net premium. Breakeven shifts by the net premium. For the PJP collar priced from the end-of-day chain at a 30-day expiry (ATM IV 21.90%), the computed maximum profit is $569.00 per contract and the computed maximum loss is -$431.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a PJP collar?: The breakeven for the PJP collar priced on this page is roughly $105.31 at expiration, derived from end-of-day chain premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The current PJP market-implied 1-standard-deviation expected move is approximately 6.28%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on PJP?: Collars on PJP hedge an existing long PJP etf position; the long put sets a floor while the short call finances it, often run as a near-zero-cost hedge during expected volatility windows.
How does current PJP implied volatility affect this collar?: PJP ATM IV is at 21.90% with IV rank near 19.48%, which is on the low end of its 1-year range. Premium-buying structures (long call, long put, debit spreads) are relatively cheap in this regime; premium-selling structures collect less credit per unit risk.