AN Collar Strategy
AN (AutoNation, Inc.), in the Consumer Cyclical sector, (Auto - Dealerships industry), listed on NYSE.
AutoNation, Inc., through its subsidiaries, operates as an automotive retailer in the United States. The company operates through three segments: Domestic, Import, and Premium Luxury. It offers a range of automotive products and services, including new and used vehicles; and parts and services, such as automotive repair and maintenance, and wholesale parts and collision services. The company also provides automotive finance and insurance products comprising vehicle services and other protection products, as well as arranges finance for vehicle purchases through third-party finance sources. As of December 31, 2021, it owned and operated 339 new vehicle franchises from 247 stores located primarily in metropolitan markets in the Sunbelt region. The company also owned and operated 57 AutoNation-branded collision centers, 9 AutoNation USA used vehicle stores, 4 AutoNation-branded automotive auction operations, and 3 parts distribution centers.
AN (AutoNation, Inc.) trades in the Consumer Cyclical sector, specifically Auto - Dealerships, with a market capitalization of approximately $6.40B, a trailing P/E of 9.77, a beta of 0.79 versus the broader market, a 52-week range of 176.25-228.92, average daily share volume of 425K, a public-listing history dating back to 1990, approximately 25K full-time employees. These structural characteristics shape how AN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.79 places AN roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 9.77 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price.
What is a collar on AN?
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 AN snapshot
As of May 15, 2026, spot at $185.34, ATM IV 31.60%, IV rank 34.98%, expected move 9.06%. The collar on AN 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 AN specifically: IV regime affects collar pricing on both sides; mid-range AN IV at 31.60% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 9.06% (roughly $16.79 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 AN expiries trade a higher absolute premium for lower per-day decay. Position sizing on AN should anchor to the underlying notional of $185.34 per share and to the trader's directional view on AN stock.
AN collar setup
The AN 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 AN near $185.34, the first option leg uses a $195.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AN 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 AN shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $185.34 | long |
| Sell 1 | Call | $195.00 | $3.53 |
| Buy 1 | Put | $175.00 | $3.23 |
AN collar risk and reward
- Net Premium / Debit
- -$18,504.00
- Max Profit (per contract)
- $996.00
- Max Loss (per contract)
- -$1,004.00
- Breakeven(s)
- $185.04
- Risk / Reward Ratio
- 0.992
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.
AN collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on AN. 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% | -$1,004.00 |
| $40.99 | -77.9% | -$1,004.00 |
| $81.97 | -55.8% | -$1,004.00 |
| $122.95 | -33.7% | -$1,004.00 |
| $163.92 | -11.6% | -$1,004.00 |
| $204.90 | +10.6% | +$996.00 |
| $245.88 | +32.7% | +$996.00 |
| $286.86 | +54.8% | +$996.00 |
| $327.84 | +76.9% | +$996.00 |
| $368.82 | +99.0% | +$996.00 |
When traders use collar on AN
Collars on AN hedge an existing long AN 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.
AN thesis for this collar
The market-implied 1-standard-deviation range for AN extends from approximately $168.55 on the downside to $202.13 on the upside. A AN collar hedges an existing long AN 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 AN IV rank near 34.98% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on AN should anchor more to the directional view and the expected-move geometry. As a Consumer Cyclical name, AN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AN-specific events.
AN 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. AN positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move AN alongside the broader basket even when AN-specific fundamentals are unchanged. Always rebuild the position from current AN chain quotes before placing a trade.
Frequently asked questions
- What is a collar on AN?
- A collar on AN is the collar strategy applied to AN (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 AN stock trading near $185.34, the strikes shown on this page are snapped to the nearest listed AN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are AN 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 AN collar priced from the end-of-day chain at a 30-day expiry (ATM IV 31.60%), the computed maximum profit is $996.00 per contract and the computed maximum loss is -$1,004.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a AN collar?
- The breakeven for the AN collar priced on this page is roughly $185.04 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 AN market-implied 1-standard-deviation expected move is approximately 9.06%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on AN?
- Collars on AN hedge an existing long AN 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 AN implied volatility affect this collar?
- AN ATM IV is at 31.60% with IV rank near 34.98%, 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.