ACB Collar Strategy
ACB (Aurora Cannabis Inc.), in the Healthcare sector, (Drug Manufacturers - Specialty & Generic industry), listed on NASDAQ.
Aurora Cannabis Inc. produces, distributes, and sells cannabis and cannabis derivative products in Canada and internationally. It also engages in facility engineering and design, cannabis breeding, research, production, derivatives, product development, wholesale, and retail distribution activities. The company produces various strains of dried cannabis, cannabis oil and capsules, and topical kits for medical patients. It also sells vaporizers; consumable vaporizer accessories; and herb mills for using CanniMed herbal cannabis products, as well as grinders and vaporizer lockable containers. In addition, the company engages in the development of medical cannabis products at various stages of development, including oral, topical, edible, and inhalable products; and operation of CanvasRX, a network of cannabis counseling and outreach centers. Further, it provides patient counselling services; design and construction services; and cannabis analytical product testing services.
ACB (Aurora Cannabis Inc.) trades in the Healthcare sector, specifically Drug Manufacturers - Specialty & Generic, with a market capitalization of approximately $189.4M, a beta of 1.33 versus the broader market, a 52-week range of 3.07-6.665, average daily share volume of 947K, 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 1.33 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 May 15, 2026, spot at $3.29, ATM IV 79.20%, IV rank 18.17%, expected move 22.71%. 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 34-day expiry.
Why this collar structure on ACB specifically: IV regime affects collar pricing on both sides; compressed ACB IV at 79.20% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 22.71% (roughly $0.75 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 ACB expiries trade a higher absolute premium for lower per-day decay. Position sizing on ACB should anchor to the underlying notional of $3.29 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 $3.29, the first option leg uses a $3.45 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 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 ACB shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $3.29 | long |
| Sell 1 | Call | $3.45 | N/A |
| Buy 1 | Put | $3.13 | 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 $2.54 on the downside to $4.04 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 18.17% 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 79.20%. 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 $3.29, 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 79.20%), 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 22.71%; 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 79.20% with IV rank near 18.17%, 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.