ALKS Collar Strategy
ALKS (Alkermes plc), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Alkermes plc, a biopharmaceutical company, researches, develops, and commercializes pharmaceutical products to address unmet medical needs of patients in various therapeutic areas in the United States, Ireland, and internationally. Its marketed products include ARISTADA, an intramuscular injectable suspension for the treatment of schizophrenia; VIVITROL for the treatment of alcohol and prevention of opioid dependence; RISPERDAL CONSTA for the treatment of schizophrenia and bipolar I disorder; INVEGA SUSTENNA for the treatment of schizophrenia and schizoaffective disorder; XEPLION, INVEGA TRINZA, and TREVICTA to treat schizophrenia and schizoaffective; and VUMERITY for the treatment of relapsing forms of multiple sclerosis in adults, including clinically isolated syndrome, relapsing-remitting and active secondary progressive diseases. The company is also developing LYBALVI, an oral atypical antipsychotic drug candidate for the treatment of adults with schizophrenia and bipolar I disorder; and nemvaleukin alfa, an engineered fusion protein to expand tumor-killing immune cells and to avoid the activation of immunosuppressive cells. It has collaboration agreements primarily with Janssen Pharmaceutica N.V., Janssen Pharmaceutica Inc, and Janssen Pharmaceutica International. Alkermes plc was founded in 1987 and is headquartered in Dublin, Ireland.
ALKS (Alkermes plc) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $6.49B, a trailing P/E of 42.34, a beta of 0.26 versus the broader market, a 52-week range of 25.17-39.56, average daily share volume of 2.4M, a public-listing history dating back to 1991, approximately 2K full-time employees. These structural characteristics shape how ALKS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.26 indicates ALKS 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 42.34 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.
What is a collar on ALKS?
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 ALKS snapshot
As of May 15, 2026, spot at $37.66, ATM IV 38.80%, IV rank 10.25%, expected move 11.12%. The collar on ALKS 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 ALKS specifically: IV regime affects collar pricing on both sides; compressed ALKS IV at 38.80% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 11.12% (roughly $4.19 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 ALKS expiries trade a higher absolute premium for lower per-day decay. Position sizing on ALKS should anchor to the underlying notional of $37.66 per share and to the trader's directional view on ALKS stock.
ALKS collar setup
The ALKS 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 ALKS near $37.66, the first option leg uses a $40.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ALKS 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 ALKS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $37.66 | long |
| Sell 1 | Call | $40.00 | $0.93 |
| Buy 1 | Put | $36.00 | $1.08 |
ALKS collar risk and reward
- Net Premium / Debit
- -$3,781.00
- Max Profit (per contract)
- $219.00
- Max Loss (per contract)
- -$181.00
- Breakeven(s)
- $37.81
- Risk / Reward Ratio
- 1.210
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.
ALKS collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on ALKS. 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% | -$181.00 |
| $8.34 | -77.9% | -$181.00 |
| $16.66 | -55.8% | -$181.00 |
| $24.99 | -33.7% | -$181.00 |
| $33.31 | -11.5% | -$181.00 |
| $41.64 | +10.6% | +$219.00 |
| $49.96 | +32.7% | +$219.00 |
| $58.29 | +54.8% | +$219.00 |
| $66.62 | +76.9% | +$219.00 |
| $74.94 | +99.0% | +$219.00 |
When traders use collar on ALKS
Collars on ALKS hedge an existing long ALKS 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.
ALKS thesis for this collar
The market-implied 1-standard-deviation range for ALKS extends from approximately $33.47 on the downside to $41.85 on the upside. A ALKS collar hedges an existing long ALKS 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 ALKS IV rank near 10.25% 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 ALKS at 38.80%. As a Healthcare name, ALKS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ALKS-specific events.
ALKS 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. ALKS positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ALKS alongside the broader basket even when ALKS-specific fundamentals are unchanged. Always rebuild the position from current ALKS chain quotes before placing a trade.
Frequently asked questions
- What is a collar on ALKS?
- A collar on ALKS is the collar strategy applied to ALKS (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 ALKS stock trading near $37.66, the strikes shown on this page are snapped to the nearest listed ALKS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are ALKS 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 ALKS collar priced from the end-of-day chain at a 30-day expiry (ATM IV 38.80%), the computed maximum profit is $219.00 per contract and the computed maximum loss is -$181.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a ALKS collar?
- The breakeven for the ALKS collar priced on this page is roughly $37.81 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 ALKS market-implied 1-standard-deviation expected move is approximately 11.12%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on ALKS?
- Collars on ALKS hedge an existing long ALKS 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 ALKS implied volatility affect this collar?
- ALKS ATM IV is at 38.80% with IV rank near 10.25%, 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.