AIT Collar Strategy
AIT (Applied Industrial Technologies, Inc.), in the Industrials sector, (Industrial - Distribution industry), listed on NYSE.
Applied Industrial Technologies, Inc. distributes industrial motion, power, control, and automation technology solutions in North America, Australia, New Zealand, and Singapore. It operates through two segments, Service Center Based Distribution, and Fluid Power & Flow Control. The company distributes bearings, power transmission products, engineered fluid power components and systems, specialty flow control solutions, advanced automation products, industrial rubber products, linear motion components, automation solutions, tools, safety products, oilfield supplies, and other industrial and maintenance supplies; and motors, belting, drives, couplings, pumps, hydraulic and pneumatic components, filtration supplies, valves, fittings, process instrumentation, actuators, and hoses, filtration supplies, as well as other related supplies for general operational needs of customers' machinery and equipment. It also operates fabricated rubber shops and service field crews that install, modify, and repair conveyor belts and rubber linings, as well as offer hose assemblies. In addition, the company provides equipment repair and technical support services. It distributes industrial products through a network of service centers.
AIT (Applied Industrial Technologies, Inc.) trades in the Industrials sector, specifically Industrial - Distribution, with a market capitalization of approximately $11.49B, a trailing P/E of 28.89, a beta of 0.86 versus the broader market, a 52-week range of 218.48-317.1, average daily share volume of 295K, a public-listing history dating back to 1980, approximately 7K full-time employees. These structural characteristics shape how AIT stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.86 places AIT roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. AIT pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on AIT?
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 AIT snapshot
As of May 15, 2026, spot at $308.78, ATM IV 28.00%, IV rank 28.73%, expected move 8.03%. The collar on AIT 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 AIT specifically: IV regime affects collar pricing on both sides; compressed AIT IV at 28.00% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 8.03% (roughly $24.79 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 AIT expiries trade a higher absolute premium for lower per-day decay. Position sizing on AIT should anchor to the underlying notional of $308.78 per share and to the trader's directional view on AIT stock.
AIT collar setup
The AIT 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 AIT near $308.78, the first option leg uses a $320.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AIT 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 AIT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $308.78 | long |
| Sell 1 | Call | $320.00 | $5.80 |
| Buy 1 | Put | $290.00 | $3.53 |
AIT collar risk and reward
- Net Premium / Debit
- -$30,650.50
- Max Profit (per contract)
- $1,349.50
- Max Loss (per contract)
- -$1,650.50
- Breakeven(s)
- $306.50
- Risk / Reward Ratio
- 0.818
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.
AIT collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on AIT. 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% | -$1,650.50 |
| $68.28 | -77.9% | -$1,650.50 |
| $136.55 | -55.8% | -$1,650.50 |
| $204.83 | -33.7% | -$1,650.50 |
| $273.10 | -11.6% | -$1,650.50 |
| $341.37 | +10.6% | +$1,349.50 |
| $409.64 | +32.7% | +$1,349.50 |
| $477.91 | +54.8% | +$1,349.50 |
| $546.18 | +76.9% | +$1,349.50 |
| $614.46 | +99.0% | +$1,349.50 |
When traders use collar on AIT
Collars on AIT hedge an existing long AIT 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.
AIT thesis for this collar
The market-implied 1-standard-deviation range for AIT extends from approximately $283.99 on the downside to $333.57 on the upside. A AIT collar hedges an existing long AIT 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 AIT IV rank near 28.73% 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 AIT at 28.00%. As a Industrials name, AIT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AIT-specific events.
AIT 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. AIT positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move AIT alongside the broader basket even when AIT-specific fundamentals are unchanged. Always rebuild the position from current AIT chain quotes before placing a trade.
Frequently asked questions
- What is a collar on AIT?
- A collar on AIT is the collar strategy applied to AIT (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 AIT stock trading near $308.78, the strikes shown on this page are snapped to the nearest listed AIT chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are AIT 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 AIT collar priced from the end-of-day chain at a 30-day expiry (ATM IV 28.00%), the computed maximum profit is $1,349.50 per contract and the computed maximum loss is -$1,650.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a AIT collar?
- The breakeven for the AIT collar priced on this page is roughly $306.50 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 AIT market-implied 1-standard-deviation expected move is approximately 8.03%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on AIT?
- Collars on AIT hedge an existing long AIT 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 AIT implied volatility affect this collar?
- AIT ATM IV is at 28.00% with IV rank near 28.73%, 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.