How are AJG 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 AJG collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 30.20%), the computed maximum profit is $941.00 per contract and the computed maximum loss is -$1,059.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a AJG collar?

The breakeven for the AJG collar priced on this page is roughly $250.59 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 AJG market-implied 1-standard-deviation expected move in the same options snapshot is approximately 8.66%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current AJG implied volatility affect this collar?

AJG ATM IV is at 30.20% with IV rank near 37.94%, 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.

AJG Collar Strategy

AJG (Arthur J. Gallagher & Co.), in the Financial Services sector, (Insurance - Brokers industry), listed on NYSE.

Arthur J. Gallagher & Co., alongside its various subsidiaries, operates globally, providing a wide array of services that encompass insurance brokerage, expert consulting, and outsourced claims settlement and administration. Its geographic reach extends across the United States, Australia, Bermuda, Canada, the Caribbean, New Zealand, India, and the United Kingdom. The company's business model is divided into two primary segments: Brokerage and Risk Management. The Brokerage division manages both retail and wholesale insurance operations. It also supports other brokers, including independent ones, in securing specialized or hard-to-place insurance coverage.

AJG (Arthur J. Gallagher & Co.) trades in the Financial Services sector, specifically Insurance - Brokers, with a market capitalization of approximately $65.63B, a trailing P/E of 41.79, a beta of 0.50 versus the broader market, a 52-week range of 190.75-313.55, average daily share volume of 1.8M, a public-listing history dating back to 1984, approximately 72K full-time employees. These structural characteristics shape how AJG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.50 indicates AJG has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. The trailing P/E of 41.79 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. AJG pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a collar on AJG?

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.

AJG snapshot

As of August 14, 2026, spot at $252.19, ATM IV 30.20%, IV rank 37.94%, expected move 8.66%. The collar on AJG 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 35-day expiry.

Why this collar structure on AJG specifically: IV regime affects collar pricing on both sides; mid-range AJG IV at 30.20% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 8.66% (roughly $21.83 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated AJG expiries trade a higher absolute premium for lower per-day decay. Position sizing on AJG should anchor to the underlying notional of $252.19 per share and to the trader's directional view on AJG stock.

AJG collar setup

The AJG 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 AJG at $252.19 on that close, the first option leg uses a $260.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AJG chain at a 35-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 AJG shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$252.19	long
Sell 1	Call	$260.00	$6.15
Buy 1	Put	$240.00	$4.55

AJG collar risk and reward

Net Premium / Debit: -$25,059.00
Max Profit (per contract): $941.00
Max Loss (per contract): -$1,059.00
Breakeven(s): $250.59
Risk / Reward Ratio: 0.889

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.

AJG collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on AJG. 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.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$1,059.00
$55.77	-77.9%	-$1,059.00
$111.53	-55.8%	-$1,059.00
$167.29	-33.7%	-$1,059.00
$223.05	-11.6%	-$1,059.00
$278.81	+10.6%	+$941.00
$334.57	+32.7%	+$941.00
$390.33	+54.8%	+$941.00
$446.09	+76.9%	+$941.00
$501.85	+99.0%	+$941.00

When traders use collar on AJG

Collars on AJG hedge an existing long AJG 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.

AJG thesis for this collar

The market-implied 1-standard-deviation range for AJG extends from approximately $230.36 on the downside to $274.02 on the upside. A AJG collar hedges an existing long AJG 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 AJG IV rank near 37.94% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on AJG should anchor more to the directional view and the expected-move geometry. As a Financial Services name, AJG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AJG-specific events.

AJG 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. AJG positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move AJG alongside the broader basket even when AJG-specific fundamentals are unchanged. Always rebuild the position from current AJG chain quotes before placing a trade.

Frequently asked questions

What is a collar on AJG?: A collar on AJG is the collar strategy applied to AJG (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 AJG stock at $252.19 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed AJG chain strike and the premiums come straight from that session's bid/ask midpoint.
How are AJG 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 AJG collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 30.20%), the computed maximum profit is $941.00 per contract and the computed maximum loss is -$1,059.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a AJG collar?: The breakeven for the AJG collar priced on this page is roughly $250.59 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 AJG market-implied 1-standard-deviation expected move in the same options snapshot is approximately 8.66%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on AJG?: Collars on AJG hedge an existing long AJG 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 AJG implied volatility affect this collar?: AJG ATM IV is at 30.20% with IV rank near 37.94%, 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.