How are ALGN 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 ALGN collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 34.27%), the computed maximum profit is $852.50 per contract and the computed maximum loss is -$1,147.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a ALGN collar?

The breakeven for the ALGN collar priced on this page is roughly $181.48 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 ALGN market-implied 1-standard-deviation expected move in the same options snapshot is approximately 9.82%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current ALGN implied volatility affect this collar?

ALGN ATM IV is at 34.27% with IV rank near 13.31%, 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.

ALGN Collar Strategy

ALGN (Align Technology, Inc.), in the Healthcare sector, (Medical - Devices industry), listed on NASDAQ.

Align Technology, Inc. is a medical technology enterprise that develops, produces, and markets its leading products: Invisalign transparent dental aligners and iTero digital intraoral scanners, along with related services. These offerings serve a wide range of dental professionals, including orthodontists, general dentists, and those specializing in restorative and cosmetic dentistry. The company's operations are divided into two main business units: "Clear Aligner" and "Scanners and Services." The Clear Aligner segment offers a variety of solutions. Its comprehensive products include the full Invisalign treatment for teenage patients, designed to address complex orthodontic needs such as mandibular advancement, patient compliance tracking, and managing tooth eruption. It also features specialized Invisalign First Phase I and Phase 2 packages for younger children, typically aged seven to ten, who have mixed dentition (a combination of primary and permanent teeth). Beyond these, the segment provides non-comprehensive aligner options like Invisalign moderate, lite, express, and Invisalign Go.

ALGN (Align Technology, Inc.) trades in the Healthcare sector, specifically Medical - Devices, with a market capitalization of approximately $12.46B, a trailing P/E of 30.07, a beta of 1.65 versus the broader market, a 52-week range of 122-200.44, average daily share volume of 1.0M, a public-listing history dating back to 2001, approximately 20K full-time employees. These structural characteristics shape how ALGN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.65 indicates ALGN has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.

What is a collar on ALGN?

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.

ALGN snapshot

As of August 14, 2026, spot at $180.50, ATM IV 34.27%, IV rank 13.31%, expected move 9.82%. The collar on ALGN 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 28-day expiry.

Why this collar structure on ALGN specifically: IV regime affects collar pricing on both sides; compressed ALGN IV at 34.27% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 9.82% (roughly $17.73 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 ALGN expiries trade a higher absolute premium for lower per-day decay. Position sizing on ALGN should anchor to the underlying notional of $180.50 per share and to the trader's directional view on ALGN stock.

ALGN collar setup

The ALGN 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 ALGN at $180.50 on that close, 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 ALGN 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 ALGN shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$180.50	long
Sell 1	Call	$190.00	$1.78
Buy 1	Put	$170.00	$2.75

ALGN collar risk and reward

Net Premium / Debit: -$18,147.50
Max Profit (per contract): $852.50
Max Loss (per contract): -$1,147.50
Breakeven(s): $181.48
Risk / Reward Ratio: 0.743

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.

ALGN collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on ALGN. 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%	-$1,147.50
$39.92	-77.9%	-$1,147.50
$79.83	-55.8%	-$1,147.50
$119.74	-33.7%	-$1,147.50
$159.64	-11.6%	-$1,147.50
$199.55	+10.6%	+$852.50
$239.46	+32.7%	+$852.50
$279.37	+54.8%	+$852.50
$319.28	+76.9%	+$852.50
$359.19	+99.0%	+$852.50

When traders use collar on ALGN

Collars on ALGN hedge an existing long ALGN 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.

ALGN thesis for this collar

The market-implied 1-standard-deviation range for ALGN extends from approximately $162.77 on the downside to $198.23 on the upside. A ALGN collar hedges an existing long ALGN 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 ALGN IV rank near 13.31% 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 ALGN at 34.27%. As a Healthcare name, ALGN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ALGN-specific events.

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

Frequently asked questions

What is a collar on ALGN?: A collar on ALGN is the collar strategy applied to ALGN (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 ALGN stock at $180.50 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed ALGN chain strike and the premiums come straight from that session's bid/ask midpoint.
How are ALGN 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 ALGN collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 34.27%), the computed maximum profit is $852.50 per contract and the computed maximum loss is -$1,147.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a ALGN collar?: The breakeven for the ALGN collar priced on this page is roughly $181.48 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 ALGN market-implied 1-standard-deviation expected move in the same options snapshot is approximately 9.82%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on ALGN?: Collars on ALGN hedge an existing long ALGN 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 ALGN implied volatility affect this collar?: ALGN ATM IV is at 34.27% with IV rank near 13.31%, 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.