ALRS Collar Strategy
ALRS (Alerus Financial Corporation), in the Financial Services sector, (Banks - Regional industry), listed on NASDAQ.
Alerus Financial Corporation, through its subsidiary, Alerus Financial, National Association, provides various financial services to businesses and consumers. The company operates in four segments: Banking, Retirement and Benefit Services, Wealth Management, and Mortgage. It offers various deposit products, including demand deposits, interest-bearing transaction accounts, money market accounts, time and savings deposits, checking accounts, and certificates of deposit; and treasury management products, including electronic receivables management, remote deposit capture, cash vault services, merchant services, and other cash management services. The company also provides commercial loans, business term loans, lines of credit, and commercial real estate loans, as well as construction and land development loans; consumer lending products, including residential first mortgage loans; installment loans and lines of credit; and second mortgage loans. In addition, it offers retirement plan administration and investment advisory services, employee stock ownership plan, fiduciary services, payroll, health savings accounts, and other benefit services, as well as individual retirement accounts; and financial planning, investment management, personal and corporate trust, estate administration, and custody services. Further, the company provides debit and credit cards, online banking, mobile banking/wallet, payment, private banking, payroll accounts, flex spending accounts, administration, and government health insurance program services.
ALRS (Alerus Financial Corporation) trades in the Financial Services sector, specifically Banks - Regional, with a market capitalization of approximately $668.7M, a trailing P/E of 24.94, a beta of 0.69 versus the broader market, a 52-week range of 20.26-27.6, average daily share volume of 144K, a public-listing history dating back to 2003, approximately 846 full-time employees. These structural characteristics shape how ALRS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.69 indicates ALRS has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. ALRS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on ALRS?
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 ALRS snapshot
As of May 15, 2026, spot at $26.54, ATM IV 23.00%, IV rank 2.03%, expected move 6.59%. The collar on ALRS 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 ALRS specifically: IV regime affects collar pricing on both sides; compressed ALRS IV at 23.00% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 6.59% (roughly $1.75 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 ALRS expiries trade a higher absolute premium for lower per-day decay. Position sizing on ALRS should anchor to the underlying notional of $26.54 per share and to the trader's directional view on ALRS stock.
ALRS collar setup
The ALRS 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 ALRS near $26.54, the first option leg uses a $27.87 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ALRS 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 ALRS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $26.54 | long |
| Sell 1 | Call | $27.87 | N/A |
| Buy 1 | Put | $25.21 | N/A |
ALRS collar risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
ALRS collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on ALRS. 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.
When traders use collar on ALRS
Collars on ALRS hedge an existing long ALRS 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.
ALRS thesis for this collar
The market-implied 1-standard-deviation range for ALRS extends from approximately $24.79 on the downside to $28.29 on the upside. A ALRS collar hedges an existing long ALRS 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 ALRS IV rank near 2.03% 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 ALRS at 23.00%. As a Financial Services name, ALRS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ALRS-specific events.
ALRS 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. ALRS positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ALRS alongside the broader basket even when ALRS-specific fundamentals are unchanged. Always rebuild the position from current ALRS chain quotes before placing a trade.
Frequently asked questions
- What is a collar on ALRS?
- A collar on ALRS is the collar strategy applied to ALRS (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 ALRS stock trading near $26.54, the strikes shown on this page are snapped to the nearest listed ALRS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are ALRS 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 ALRS collar priced from the end-of-day chain at a 30-day expiry (ATM IV 23.00%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a ALRS collar?
- The breakeven for the ALRS collar priced on this page is no defined breakeven on the modeled curve 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 ALRS market-implied 1-standard-deviation expected move is approximately 6.59%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on ALRS?
- Collars on ALRS hedge an existing long ALRS 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 ALRS implied volatility affect this collar?
- ALRS ATM IV is at 23.00% with IV rank near 2.03%, 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.