AQN Collar Strategy
AQN (Algonquin Power & Utilities Corp.), in the Utilities sector, (Renewable Utilities industry), listed on NYSE.
Algonquin Power & Utilities Corp., through its subsidiaries, owns and operates a portfolio of regulated and non-regulated generation, distribution, and transmission utility assets. The company operates through two segments, Regulated Services Group and Renewable Energy Group. The Regulated Services Group segment operates a portfolio of rate-regulated utilities located in the United States, Canada, Chile, and Bermuda. Its utilities provide distribution services to approximately 1,093,000 customer connections in the electric, natural gas, and water and wastewater sectors The Renewable Energy Group segment generates and sells electrical energy, capacity, ancillary products, and renewable attributes produced by its portfolio of renewable and clean power generation facilities primarily in the United States and Canada. It owns and operates hydroelectric, wind, solar, and thermal facilities; and owns and operates a portfolio of clean energy and water infrastructure assets. The company was incorporated in 1988 and is headquartered in Oakville, Canada.
AQN (Algonquin Power & Utilities Corp.) trades in the Utilities sector, specifically Renewable Utilities, with a market capitalization of approximately $4.54B, a trailing P/E of 26.94, a beta of 0.88 versus the broader market, a 52-week range of 5.32-7.11, average daily share volume of 4.4M, a public-listing history dating back to 2009, approximately 4K full-time employees. These structural characteristics shape how AQN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.88 places AQN roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. AQN pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on AQN?
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 AQN snapshot
As of May 15, 2026, spot at $5.75, ATM IV 95.40%, IV rank 62.56%, expected move 27.35%. The collar on AQN 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 AQN specifically: IV regime affects collar pricing on both sides; mid-range AQN IV at 95.40% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 27.35% (roughly $1.57 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 AQN expiries trade a higher absolute premium for lower per-day decay. Position sizing on AQN should anchor to the underlying notional of $5.75 per share and to the trader's directional view on AQN stock.
AQN collar setup
The AQN 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 AQN near $5.75, the first option leg uses a $6.04 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AQN 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 AQN shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $5.75 | long |
| Sell 1 | Call | $6.04 | N/A |
| Buy 1 | Put | $5.46 | N/A |
AQN 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.
AQN collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on AQN. 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 AQN
Collars on AQN hedge an existing long AQN 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.
AQN thesis for this collar
The market-implied 1-standard-deviation range for AQN extends from approximately $4.18 on the downside to $7.32 on the upside. A AQN collar hedges an existing long AQN 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 AQN IV rank near 62.56% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on AQN should anchor more to the directional view and the expected-move geometry. As a Utilities name, AQN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AQN-specific events.
AQN 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. AQN positions also carry Utilities sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move AQN alongside the broader basket even when AQN-specific fundamentals are unchanged. Always rebuild the position from current AQN chain quotes before placing a trade.
Frequently asked questions
- What is a collar on AQN?
- A collar on AQN is the collar strategy applied to AQN (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 AQN stock trading near $5.75, the strikes shown on this page are snapped to the nearest listed AQN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are AQN 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 AQN collar priced from the end-of-day chain at a 30-day expiry (ATM IV 95.40%), 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 AQN collar?
- The breakeven for the AQN 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 AQN market-implied 1-standard-deviation expected move is approximately 27.35%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on AQN?
- Collars on AQN hedge an existing long AQN 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 AQN implied volatility affect this collar?
- AQN ATM IV is at 95.40% with IV rank near 62.56%, 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.