How are ALRM 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 ALRM collar priced from the end-of-day chain at a 30-day expiry (ATM IV 30.80%), the computed maximum profit is $349.00 per contract and the computed maximum loss is -$151.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a ALRM collar?

The breakeven for the ALRM collar priced on this page is roughly $46.51 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 ALRM market-implied 1-standard-deviation expected move is approximately 8.83%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current ALRM implied volatility affect this collar?

ALRM ATM IV is at 30.80% with IV rank near 3.49%, 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.

ALRM Collar Strategy

ALRM (Alarm.com Holdings, Inc.), in the Technology sector, (Software - Application industry), listed on NASDAQ.

Alarm.com Holdings, Inc. delivers a comprehensive suite of cloud-enabled services tailored for intelligent residential and commercial properties, serving clients across the United States and internationally. The company's operations are divided into two primary divisions: Alarm.com and Other. Its core offerings include interactive security platforms, empowering users to manage and oversee their security systems alongside various connected devices. These integrated security components encompass smart door locks, motion sensors, garage door openers, a range of Internet of Things (IoT) devices, smart thermostats, and advanced video cameras. Furthermore, the company specializes in sophisticated video surveillance capabilities, incorporating features such as video analytics, live streaming, video doorbells, recorded video clips, automated video alerts, continuous high-definition recording, and dedicated commercial video monitoring systems. Beyond security, Alarm.com provides intelligent automation and energy management solutions.

ALRM (Alarm.com Holdings, Inc.) trades in the Technology sector, specifically Software - Application, with a market capitalization of approximately $2.29B, a trailing P/E of 17.93, a beta of 0.78 versus the broader market, a 52-week range of 41.49-59.53, average daily share volume of 532K, a public-listing history dating back to 2015, approximately 2K full-time employees. These structural characteristics shape how ALRM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.78 places ALRM roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.

What is a collar on ALRM?

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 ALRM snapshot

As of June 30, 2026, spot at $46.61, ATM IV 30.80%, IV rank 3.49%, expected move 8.83%. The collar on ALRM 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 171-day expiry.

Why this collar structure on ALRM specifically: IV regime affects collar pricing on both sides; compressed ALRM IV at 30.80% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 8.83% (roughly $4.12 on the underlying). The 171-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated ALRM expiries trade a higher absolute premium for lower per-day decay. Position sizing on ALRM should anchor to the underlying notional of $46.61 per share and to the trader's directional view on ALRM stock.

ALRM collar setup

The ALRM 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 ALRM near $46.61, the first option leg uses a $50.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ALRM chain at a 171-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 ALRM shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$46.61	long
Sell 1	Call	$50.00	$4.18
Buy 1	Put	$45.00	$4.08

ALRM collar risk and reward

Net Premium / Debit: -$4,651.00
Max Profit (per contract): $349.00
Max Loss (per contract): -$151.00
Breakeven(s): $46.51
Risk / Reward Ratio: 2.311

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.

ALRM collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on ALRM. 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%	-$151.00
$10.31	-77.9%	-$151.00
$20.62	-55.8%	-$151.00
$30.92	-33.7%	-$151.00
$41.23	-11.5%	-$151.00
$51.53	+10.6%	+$349.00
$61.84	+32.7%	+$349.00
$72.14	+54.8%	+$349.00
$82.45	+76.9%	+$349.00
$92.75	+99.0%	+$349.00

When traders use collar on ALRM

Collars on ALRM hedge an existing long ALRM 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.

ALRM thesis for this collar

The market-implied 1-standard-deviation range for ALRM extends from approximately $42.49 on the downside to $50.73 on the upside. A ALRM collar hedges an existing long ALRM 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 ALRM IV rank near 3.49% 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 ALRM at 30.80%. As a Technology name, ALRM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ALRM-specific events.

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

Frequently asked questions

What is a collar on ALRM?: A collar on ALRM is the collar strategy applied to ALRM (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 ALRM stock trading near $46.61, the strikes shown on this page are snapped to the nearest listed ALRM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are ALRM 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 ALRM collar priced from the end-of-day chain at a 30-day expiry (ATM IV 30.80%), the computed maximum profit is $349.00 per contract and the computed maximum loss is -$151.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a ALRM collar?: The breakeven for the ALRM collar priced on this page is roughly $46.51 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 ALRM market-implied 1-standard-deviation expected move is approximately 8.83%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on ALRM?: Collars on ALRM hedge an existing long ALRM 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 ALRM implied volatility affect this collar?: ALRM ATM IV is at 30.80% with IV rank near 3.49%, 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.