AGM Collar Strategy
AGM (Federal Agricultural Mortgage Corporation), in the Financial Services sector, (Financial - Credit Services industry), listed on NYSE.
Federal Agricultural Mortgage Corporation provides a secondary market for various loans made to borrowers in the United States. It operates through four segments: Farm & Ranch, USDA (United States Department of Agriculture) Guarantees, Rural Utilities, and Institutional Credit. The Farm & Ranch segment purchases and retains eligible mortgage loans that are secured by first liens on agricultural real estate; securitizes eligible mortgage loans, and guarantees the timely payment of principal and interest on securities representing interests in or obligations secured by pools of mortgage loans; and issues long-term standby purchase commitments (LTSPC) on designated eligible mortgage loans. The USDA Guarantees segment purchases portions of certain agricultural and rural development loans guaranteed by the USDA. The Rural Utilities segment purchases and guarantees securities that are backed by loans for electric or telecommunications facilities by lenders organized as cooperatives to borrowers; and purchases eligible rural utilities loans and guarantees of securities backed by those loans, as well as LTSPCs for pools of eligible rural utilities loans. The Institutional Credit segment guarantees and purchases general obligations of lenders and other financial institutions that are secured by pools of loans eligible under the Farmer Mac's Farm & Ranch, USDA Guarantees, or Rural Utilities lines of business.
AGM (Federal Agricultural Mortgage Corporation) trades in the Financial Services sector, specifically Financial - Credit Services, with a market capitalization of approximately $1.87B, a trailing P/E of 10.20, a beta of 1.04 versus the broader market, a 52-week range of 136.57-210.64, average daily share volume of 117K, a public-listing history dating back to 1994, approximately 191 full-time employees. These structural characteristics shape how AGM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.04 places AGM roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 10.20 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. AGM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on AGM?
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 AGM snapshot
As of May 15, 2026, spot at $172.16, ATM IV 32.10%, IV rank 6.29%, expected move 9.20%. The collar on AGM 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 AGM specifically: IV regime affects collar pricing on both sides; compressed AGM IV at 32.10% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 9.20% (roughly $15.84 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 AGM expiries trade a higher absolute premium for lower per-day decay. Position sizing on AGM should anchor to the underlying notional of $172.16 per share and to the trader's directional view on AGM stock.
AGM collar setup
The AGM 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 AGM near $172.16, the first option leg uses a $180.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AGM 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 AGM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $172.16 | long |
| Sell 1 | Call | $180.00 | $2.98 |
| Buy 1 | Put | $165.00 | $3.75 |
AGM collar risk and reward
- Net Premium / Debit
- -$17,293.50
- Max Profit (per contract)
- $706.50
- Max Loss (per contract)
- -$793.50
- Breakeven(s)
- $172.94
- Risk / Reward Ratio
- 0.890
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.
AGM collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on AGM. 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% | -$793.50 |
| $38.07 | -77.9% | -$793.50 |
| $76.14 | -55.8% | -$793.50 |
| $114.20 | -33.7% | -$793.50 |
| $152.27 | -11.6% | -$793.50 |
| $190.33 | +10.6% | +$706.50 |
| $228.40 | +32.7% | +$706.50 |
| $266.46 | +54.8% | +$706.50 |
| $304.53 | +76.9% | +$706.50 |
| $342.59 | +99.0% | +$706.50 |
When traders use collar on AGM
Collars on AGM hedge an existing long AGM 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.
AGM thesis for this collar
The market-implied 1-standard-deviation range for AGM extends from approximately $156.32 on the downside to $188.00 on the upside. A AGM collar hedges an existing long AGM 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 AGM IV rank near 6.29% 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 AGM at 32.10%. As a Financial Services name, AGM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AGM-specific events.
AGM 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. AGM positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move AGM alongside the broader basket even when AGM-specific fundamentals are unchanged. Always rebuild the position from current AGM chain quotes before placing a trade.
Frequently asked questions
- What is a collar on AGM?
- A collar on AGM is the collar strategy applied to AGM (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 AGM stock trading near $172.16, the strikes shown on this page are snapped to the nearest listed AGM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are AGM 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 AGM collar priced from the end-of-day chain at a 30-day expiry (ATM IV 32.10%), the computed maximum profit is $706.50 per contract and the computed maximum loss is -$793.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a AGM collar?
- The breakeven for the AGM collar priced on this page is roughly $172.94 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 AGM market-implied 1-standard-deviation expected move is approximately 9.20%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on AGM?
- Collars on AGM hedge an existing long AGM 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 AGM implied volatility affect this collar?
- AGM ATM IV is at 32.10% with IV rank near 6.29%, 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.