ACB Collar Strategy
ACB (Aurora Cannabis Inc.), in the Healthcare sector, (Drug Manufacturers - Specialty & Generic industry), listed on NASDAQ.
Aurora Cannabis Inc. is a leading company in the global cannabis industry, focusing on the cultivation, production, and sale of various cannabis and cannabis-derived products across Canada and internationally. Beyond its core product offerings, the company engages in a broad spectrum of related activities, including the design and engineering of facilities, cannabis breeding programs, research and development, and both wholesale and retail distribution channels. For medical users, Aurora provides a diverse selection of products such as different strains of dried cannabis, cannabis oils, capsules, and topical kits. Their inventory also includes ancillary items like vaporizers, vaporizer accessories, herb mills (specifically for CanniMed products), grinders, and secure containers for vaporizers. The company is actively involved in developing advanced medical cannabis products, with ongoing work on oral, topical, edible, and inhalable formulations. Furthermore, Aurora manages CanvasRX, a network of centers dedicated to cannabis counseling and community outreach.
ACB (Aurora Cannabis Inc.) trades in the Healthcare sector, specifically Drug Manufacturers - Specialty & Generic, with a market capitalization of approximately $175.3M, a beta of 1.34 versus the broader market, a 52-week range of 2.73-6.665, average daily share volume of 1.1M, a public-listing history dating back to 2014, approximately 1K full-time employees. These structural characteristics shape how ACB stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.34 indicates ACB has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a collar on ACB?
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 ACB snapshot
As of June 29, 2026, spot at $2.88, ATM IV 20.00%, IV rank 1.03%, expected move 5.73%. The collar on ACB 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 18-day expiry.
Why this collar structure on ACB specifically: IV regime affects collar pricing on both sides; compressed ACB IV at 20.00% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 5.73% (roughly $0.17 on the underlying). The 18-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated ACB expiries trade a higher absolute premium for lower per-day decay. Position sizing on ACB should anchor to the underlying notional of $2.88 per share and to the trader's directional view on ACB stock.
ACB collar setup
The ACB 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 ACB near $2.88, the first option leg uses a $3.02 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ACB chain at a 18-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 ACB shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $2.88 | long |
| Sell 1 | Call | $3.02 | N/A |
| Buy 1 | Put | $2.74 | N/A |
ACB collar risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
ACB collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on ACB. 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.
When traders use collar on ACB
Collars on ACB hedge an existing long ACB stock 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.
ACB thesis for this collar
The market-implied 1-standard-deviation range for ACB extends from approximately $2.71 on the downside to $3.05 on the upside. A ACB collar hedges an existing long ACB 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 ACB IV rank near 1.03% 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 ACB at 20.00%. As a Healthcare name, ACB options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ACB-specific events.
ACB 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. ACB positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ACB alongside the broader basket even when ACB-specific fundamentals are unchanged. Always rebuild the position from current ACB chain quotes before placing a trade.
Frequently asked questions
- What is a collar on ACB?
- A collar on ACB is the collar strategy applied to ACB (stock). 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 ACB stock trading near $2.88, the strikes shown on this page are snapped to the nearest listed ACB chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are ACB 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 ACB collar priced from the end-of-day chain at a 30-day expiry (ATM IV 20.00%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a ACB collar?
- The breakeven for the ACB collar priced on this page is no defined breakeven on the modeled curve 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 ACB market-implied 1-standard-deviation expected move is approximately 5.73%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on ACB?
- Collars on ACB hedge an existing long ACB stock 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 ACB implied volatility affect this collar?
- ACB ATM IV is at 20.00% with IV rank near 1.03%, 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.