ALG Collar Strategy
ALG (Alamo Group Inc.), in the Industrials sector, (Industrial - Machinery industry), listed on NYSE.
Alamo Group Inc. is a global enterprise specializing in the design, production, distribution, and servicing of equipment crucial for managing vegetation and maintaining public and private infrastructure. It serves a broad international clientele spanning governmental agencies, industrial operations, and agricultural businesses. The company operates through two main divisions: Vegetation Management Division: This segment provides a comprehensive range of machinery and associated components for controlling plant growth and preparing land. Offerings include robust, hydraulically-powered and tractor-mounted mowers, various types of cutters for intensive use, specialized agricultural implements such as rotary tillers, posthole diggers, and scraper blades, as well as zero-turn mowers, snow blowers, and rock removal equipment. It also supplies a wide array of replacement parts, from cutting blades to fertilizer application components and hydraulic boom-mounted hedge and grass cutters. Industrial Equipment Division: This division focuses on apparatus for public works and utility maintenance.
ALG (Alamo Group Inc.) trades in the Industrials sector, specifically Industrial - Machinery, with a market capitalization of approximately $1.69B, a trailing P/E of 21.51, a beta of 1.08 versus the broader market, a 52-week range of 133.32-219.88, average daily share volume of 162K, a public-listing history dating back to 1993, approximately 4K full-time employees. These structural characteristics shape how ALG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.08 places ALG roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. ALG pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on ALG?
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.
ALG snapshot
As of November 13, 2026, spot at $138.49, ATM IV 25.60%, IV rank 28.80%, expected move 7.34%. The collar on ALG below is built from the November 13, 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 ALG specifically: IV regime affects collar pricing on both sides; compressed ALG IV at 25.60% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 7.34% (roughly $10.16 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 ALG expiries trade a higher absolute premium for lower per-day decay. Position sizing on ALG should anchor to the underlying notional of $138.49 per share and to the trader's directional view on ALG stock.
ALG collar setup
The ALG collar below is built from the November 13, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With ALG at $138.49 on that close, the first option leg uses a $145.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ALG 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 ALG shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $138.49 | long |
| Sell 1 | Call | $145.00 | $2.73 |
| Buy 1 | Put | $130.00 | $0.88 |
ALG collar risk and reward
- Net Premium / Debit
- -$13,664.50
- Max Profit (per contract)
- $835.50
- Max Loss (per contract)
- -$664.50
- Breakeven(s)
- $136.65
- Risk / Reward Ratio
- 1.257
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.
ALG collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on ALG. 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% | -$664.50 |
| $30.63 | -77.9% | -$664.50 |
| $61.25 | -55.8% | -$664.50 |
| $91.87 | -33.7% | -$664.50 |
| $122.49 | -11.6% | -$664.50 |
| $153.11 | +10.6% | +$835.50 |
| $183.73 | +32.7% | +$835.50 |
| $214.35 | +54.8% | +$835.50 |
| $244.97 | +76.9% | +$835.50 |
| $275.59 | +99.0% | +$835.50 |
When traders use collar on ALG
Collars on ALG hedge an existing long ALG 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.
ALG thesis for this collar
The market-implied 1-standard-deviation range for ALG extends from approximately $128.33 on the downside to $148.65 on the upside. A ALG collar hedges an existing long ALG 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 ALG IV rank near 28.80% 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 ALG at 25.60%. As a Industrials name, ALG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ALG-specific events.
ALG 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. ALG positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ALG alongside the broader basket even when ALG-specific fundamentals are unchanged. Always rebuild the position from current ALG chain quotes before placing a trade.
Frequently asked questions
- What is a collar on ALG?
- A collar on ALG is the collar strategy applied to ALG (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 ALG stock at $138.49 on the November 13, 2026 close, the strikes shown on this page are snapped to the nearest listed ALG chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are ALG 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 ALG collar priced from the November 13, 2026 end-of-day chain at a 30-day expiry (ATM IV 25.60%), the computed maximum profit is $835.50 per contract and the computed maximum loss is -$664.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a ALG collar?
- The breakeven for the ALG collar priced on this page is roughly $136.65 at expiration, derived from the November 13, 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 ALG market-implied 1-standard-deviation expected move in the same options snapshot is approximately 7.34%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on ALG?
- Collars on ALG hedge an existing long ALG 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 ALG implied volatility affect this collar?
- ALG ATM IV is at 25.60% with IV rank near 28.80%, 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.