ADI Collar Strategy
ADI (Analog Devices, Inc.), in the Technology sector, (Semiconductors industry), listed on NASDAQ.
Analog Devices, Inc. (ADI) is a technology leader specializing in the conception, production, validation, and global marketing of integrated circuits (ICs), software solutions, and advanced subsystems. Their offerings leverage sophisticated analog, mixed-signal, and digital signal processing technologies. The company's comprehensive product lineup features data converters, which are critical for transforming real-world analog signals into digital data and subsequently converting digital data back into analog signals. They also provide power management and reference devices, essential for power conversion, driver supervision, system sequencing, and energy optimization in industries such as automotive, telecommunications, industrial applications, and premium consumer markets. These power ICs are supported by integrated performance, integration, and software design simulation tools for precise power supply development. ADI's portfolio further includes high-performance amplifiers, designed for conditioning analog signals, as well as radio frequency (RF) and microwave ICs that underpin cellular infrastructure.
ADI (Analog Devices, Inc.) trades in the Technology sector, specifically Semiconductors, with a market capitalization of approximately $187.25B, a trailing P/E of 56.57, a beta of 1.21 versus the broader market, a 52-week range of 223.47-445.91, average daily share volume of 4.3M, a public-listing history dating back to 1980, approximately 25K full-time employees. These structural characteristics shape how ADI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.21 places ADI roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 56.57 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple. ADI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on ADI?
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.
ADI snapshot
As of August 14, 2026, spot at $386.75, ATM IV 45.54%, IV rank 55.64%, expected move 13.05%. The collar on ADI below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 28-day expiry.
Why this collar structure on ADI specifically: IV regime affects collar pricing on both sides; mid-range ADI IV at 45.54% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 13.05% (roughly $50.49 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated ADI expiries trade a higher absolute premium for lower per-day decay. Position sizing on ADI should anchor to the underlying notional of $386.75 per share and to the trader's directional view on ADI stock.
ADI collar setup
The ADI collar below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With ADI at $386.75 on that close, the first option leg uses a $405.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ADI chain at a 28-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 ADI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $386.75 | long |
| Sell 1 | Call | $405.00 | $11.60 |
| Buy 1 | Put | $365.00 | $10.15 |
ADI collar risk and reward
- Net Premium / Debit
- -$38,530.00
- Max Profit (per contract)
- $1,970.00
- Max Loss (per contract)
- -$2,030.00
- Breakeven(s)
- $385.30
- Risk / Reward Ratio
- 0.970
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.
ADI collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on ADI. 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% | -$2,030.00 |
| $85.52 | -77.9% | -$2,030.00 |
| $171.03 | -55.8% | -$2,030.00 |
| $256.54 | -33.7% | -$2,030.00 |
| $342.06 | -11.6% | -$2,030.00 |
| $427.57 | +10.6% | +$1,970.00 |
| $513.08 | +32.7% | +$1,970.00 |
| $598.59 | +54.8% | +$1,970.00 |
| $684.10 | +76.9% | +$1,970.00 |
| $769.61 | +99.0% | +$1,970.00 |
When traders use collar on ADI
Collars on ADI hedge an existing long ADI 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.
ADI thesis for this collar
The market-implied 1-standard-deviation range for ADI extends from approximately $336.26 on the downside to $437.24 on the upside. A ADI collar hedges an existing long ADI 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 ADI IV rank near 55.64% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on ADI should anchor more to the directional view and the expected-move geometry. As a Technology name, ADI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ADI-specific events.
ADI 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. ADI positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ADI alongside the broader basket even when ADI-specific fundamentals are unchanged. Always rebuild the position from current ADI chain quotes before placing a trade.
Frequently asked questions
- What is a collar on ADI?
- A collar on ADI is the collar strategy applied to ADI (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 ADI stock at $386.75 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed ADI chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are ADI 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 ADI collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 45.54%), the computed maximum profit is $1,970.00 per contract and the computed maximum loss is -$2,030.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a ADI collar?
- The breakeven for the ADI collar priced on this page is roughly $385.30 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The ADI market-implied 1-standard-deviation expected move in the same options snapshot is approximately 13.05%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on ADI?
- Collars on ADI hedge an existing long ADI 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 ADI implied volatility affect this collar?
- ADI ATM IV is at 45.54% with IV rank near 55.64%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.