AEM Collar Strategy
AEM (Agnico Eagle Mines Limited), in the Basic Materials sector, (Gold industry), listed on NYSE.
Agnico Eagle Mines Limited engages in the exploration, development, and production of mineral properties in Canada, Mexico, and Finland. It operates through Northern Business and Southern Business segments. The company primarily produces and sells gold deposits, as well as explores for silver, zinc, and copper deposits. Its flagship property is the LaRonde mine located in the Abitibi region of northwestern Quebec, Canada. As of December 31, 2021, the company's LaRonde mine had proven and probable mineral reserves of approximately 3.0 million ounces of gold. It is also involved in exploration activities in Europe, Latin America, and the United States.
AEM (Agnico Eagle Mines Limited) trades in the Basic Materials sector, specifically Gold, with a market capitalization of approximately $98.18B, a trailing P/E of 18.39, a beta of 0.57 versus the broader market, a 52-week range of 103.97-255.24, average daily share volume of 2.6M, a public-listing history dating back to 1972, approximately 10K full-time employees. These structural characteristics shape how AEM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.57 indicates AEM has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. AEM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on AEM?
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 AEM snapshot
As of May 15, 2026, spot at $180.59, ATM IV 43.72%, IV rank 50.92%, expected move 12.54%. The collar on AEM 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 28-day expiry.
Why this collar structure on AEM specifically: IV regime affects collar pricing on both sides; mid-range AEM IV at 43.72% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 12.54% (roughly $22.64 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 AEM expiries trade a higher absolute premium for lower per-day decay. Position sizing on AEM should anchor to the underlying notional of $180.59 per share and to the trader's directional view on AEM stock.
AEM collar setup
The AEM 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 AEM near $180.59, the first option leg uses a $190.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AEM 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 AEM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $180.59 | long |
| Sell 1 | Call | $190.00 | $5.25 |
| Buy 1 | Put | $170.00 | $4.15 |
AEM collar risk and reward
- Net Premium / Debit
- -$17,949.00
- Max Profit (per contract)
- $1,051.00
- Max Loss (per contract)
- -$949.00
- Breakeven(s)
- $179.49
- Risk / Reward Ratio
- 1.107
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.
AEM collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on AEM. 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% | -$949.00 |
| $39.94 | -77.9% | -$949.00 |
| $79.87 | -55.8% | -$949.00 |
| $119.80 | -33.7% | -$949.00 |
| $159.72 | -11.6% | -$949.00 |
| $199.65 | +10.6% | +$1,051.00 |
| $239.58 | +32.7% | +$1,051.00 |
| $279.51 | +54.8% | +$1,051.00 |
| $319.44 | +76.9% | +$1,051.00 |
| $359.37 | +99.0% | +$1,051.00 |
When traders use collar on AEM
Collars on AEM hedge an existing long AEM 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.
AEM thesis for this collar
The market-implied 1-standard-deviation range for AEM extends from approximately $157.95 on the downside to $203.23 on the upside. A AEM collar hedges an existing long AEM 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 AEM IV rank near 50.92% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on AEM should anchor more to the directional view and the expected-move geometry. As a Basic Materials name, AEM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AEM-specific events.
AEM 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. AEM positions also carry Basic Materials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move AEM alongside the broader basket even when AEM-specific fundamentals are unchanged. Always rebuild the position from current AEM chain quotes before placing a trade.
Frequently asked questions
- What is a collar on AEM?
- A collar on AEM is the collar strategy applied to AEM (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 AEM stock trading near $180.59, the strikes shown on this page are snapped to the nearest listed AEM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are AEM 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 AEM collar priced from the end-of-day chain at a 30-day expiry (ATM IV 43.72%), the computed maximum profit is $1,051.00 per contract and the computed maximum loss is -$949.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a AEM collar?
- The breakeven for the AEM collar priced on this page is roughly $179.49 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 AEM market-implied 1-standard-deviation expected move is approximately 12.54%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on AEM?
- Collars on AEM hedge an existing long AEM 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 AEM implied volatility affect this collar?
- AEM ATM IV is at 43.72% with IV rank near 50.92%, 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.