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 $9.94B, a trailing P/E of 18.55, a beta of 0.94 versus the broader market, a 52-week range of 76.01-137.62, average daily share volume of 865K, 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 0.94 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.
Current ALSN snapshot
As of June 30, 2026, spot at $111.34, ATM IV 36.60%, IV rank 42.50%, expected move 10.49%. The collar on ALSN 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 17-day expiry.
Why this collar structure on ALSN specifically: IV regime affects collar pricing on both sides; mid-range ALSN IV at 36.60% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 10.49% (roughly $11.68 on the underlying). The 17-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 $111.34 per share and to the trader's directional view on ALSN stock.
ALSN collar setup
The ALSN 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 ALSN near $111.34, the first option leg uses a $115.00 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 17-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 | $111.34 | long |
| Sell 1 | Call | $115.00 | $2.68 |
| Buy 1 | Put | $105.00 | $0.93 |
ALSN collar risk and reward
- Net Premium / Debit
- -$10,959.00
- Max Profit (per contract)
- $541.00
- Max Loss (per contract)
- -$459.00
- Breakeven(s)
- $109.59
- Risk / Reward Ratio
- 1.179
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.
| Underlying Price | % From Spot | P&L at Expiration |
|---|---|---|
| $0.01 | -100.0% | -$459.00 |
| $24.63 | -77.9% | -$459.00 |
| $49.24 | -55.8% | -$459.00 |
| $73.86 | -33.7% | -$459.00 |
| $98.48 | -11.6% | -$459.00 |
| $123.09 | +10.6% | +$541.00 |
| $147.71 | +32.7% | +$541.00 |
| $172.33 | +54.8% | +$541.00 |
| $196.94 | +76.9% | +$541.00 |
| $221.56 | +99.0% | +$541.00 |
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 $99.66 on the downside to $123.02 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 42.50% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on ALSN should anchor more to the directional view and the expected-move geometry. 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 trading near $111.34, the strikes shown on this page are snapped to the nearest listed ALSN chain strike and the premiums come straight from the end-of-day 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 end-of-day chain at a 30-day expiry (ATM IV 36.60%), the computed maximum profit is $541.00 per contract and the computed maximum loss is -$459.00 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 $109.59 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 ALSN market-implied 1-standard-deviation expected move is approximately 10.49%; 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 36.60% with IV rank near 42.50%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.