How are ALSN 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 ALSN collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 32.50%), the computed maximum profit is $465.50 per contract and the computed maximum loss is -$534.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a ALSN collar?

The breakeven for the ALSN collar priced on this page is roughly $125.35 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 ALSN market-implied 1-standard-deviation expected move in the same options snapshot is approximately 9.32%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current ALSN implied volatility affect this collar?

ALSN ATM IV is at 32.50% with IV rank near 2.72%, 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.

ALSN Collar Strategy

ALSN (Allison Transmission Holdings, Inc.), in the Consumer Cyclical sector, (Auto - Parts industry), listed on NYSE.

Allison Transmission Holdings, Inc. (ALSN), along with its affiliates, specializes in the global development, manufacturing, and sale of fully-automatic transmissions. These robust systems are engineered for both medium and heavy-duty commercial vehicles, as well as medium and heavy-tactical defense vehicles utilized by the U.S. military. The company's diverse product portfolio serves a broad spectrum of applications. This includes on-highway vehicles such as trucks for distribution, refuse collection, construction, fire, and emergency services, alongside school and transit buses, and recreational motor homes. Furthermore, Allison transmissions power off-highway equipment for the energy, mining, and construction industries, as well as both wheeled and tracked defense vehicles. New transmissions are marketed under the well-known Allison Transmission brand, while their remanufactured offerings are sold as ReTran.

ALSN (Allison Transmission Holdings, Inc.) trades in the Consumer Cyclical sector, specifically Auto - Parts, with a market capitalization of approximately $10.25B, a trailing P/E of 19.39, a beta of 0.95 versus the broader market, a 52-week range of 76.01-137.62, average daily share volume of 1.0M, a public-listing history dating back to 2012, approximately 4K full-time employees. These structural characteristics shape how ALSN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.95 places ALSN roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. ALSN pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a collar on ALSN?

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.

ALSN snapshot

As of August 14, 2026, spot at $125.67, ATM IV 32.50%, IV rank 2.72%, expected move 9.32%. The collar on ALSN 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 35-day expiry.

Why this collar structure on ALSN specifically: IV regime affects collar pricing on both sides; compressed ALSN IV at 32.50% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 9.32% (roughly $11.71 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 ALSN expiries trade a higher absolute premium for lower per-day decay. Position sizing on ALSN should anchor to the underlying notional of $125.67 per share and to the trader's directional view on ALSN stock.

ALSN collar setup

The ALSN 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 ALSN at $125.67 on that close, the first option leg uses a $130.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ALSN 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 ALSN shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$125.67	long
Sell 1	Call	$130.00	$3.40
Buy 1	Put	$120.00	$3.08

ALSN collar risk and reward

Net Premium / Debit: -$12,534.50
Max Profit (per contract): $465.50
Max Loss (per contract): -$534.50
Breakeven(s): $125.35
Risk / Reward Ratio: 0.871

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.

ALSN collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on ALSN. 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%	-$534.50
$27.80	-77.9%	-$534.50
$55.58	-55.8%	-$534.50
$83.37	-33.7%	-$534.50
$111.15	-11.6%	-$534.50
$138.94	+10.6%	+$465.50
$166.72	+32.7%	+$465.50
$194.51	+54.8%	+$465.50
$222.29	+76.9%	+$465.50
$250.08	+99.0%	+$465.50

When traders use collar on ALSN

Collars on ALSN hedge an existing long ALSN 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.

ALSN thesis for this collar

The market-implied 1-standard-deviation range for ALSN extends from approximately $113.96 on the downside to $137.38 on the upside. A ALSN collar hedges an existing long ALSN 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 ALSN IV rank near 2.72% 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 ALSN at 32.50%. As a Consumer Cyclical name, ALSN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ALSN-specific events.

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

Frequently asked questions

What is a collar on ALSN?: A collar on ALSN is the collar strategy applied to ALSN (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 ALSN stock at $125.67 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed ALSN chain strike and the premiums come straight from that session's bid/ask midpoint.
How are ALSN 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 ALSN collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 32.50%), the computed maximum profit is $465.50 per contract and the computed maximum loss is -$534.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a ALSN collar?: The breakeven for the ALSN collar priced on this page is roughly $125.35 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 ALSN market-implied 1-standard-deviation expected move in the same options snapshot is approximately 9.32%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on ALSN?: Collars on ALSN hedge an existing long ALSN 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 ALSN implied volatility affect this collar?: ALSN ATM IV is at 32.50% with IV rank near 2.72%, 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.