ARE Collar Strategy
ARE (Alexandria Real Estate Equities, Inc.), in the Real Estate sector, (REIT - Office industry), listed on NYSE.
Alexandria Real Estate Equities, Inc. (NYSE:ARE), an S&P 500® real estate investment trust, stands as the pioneering and most seasoned entity in the specialized domain of urban office properties. Since its inception in 1994, Alexandria has uniquely focused on the ownership, operation, and development of integrated campuses tailored for the life science, technology, and agtech sectors, strategically positioned within premier innovation ecosystems. By December 31, 2020, the company commanded a market capitalization of $31.9 billion and managed an extensive North American asset portfolio totaling 49.7 million square feet. This substantial base encompasses 31.9 million RSF of operational properties, 3.3 million RSF of premium Class A spaces currently under construction, 7.1 million RSF designated for near-to-mid-term development and refurbishment, and an additional 7.4 million SF earmarked for future projects. Alexandria has cultivated a significant footprint across vital innovation hubs such as Greater Boston, San Francisco, New York City, San Diego, Seattle, Maryland, and Research Triangle. Its established expertise lies in crafting superior Class A facilities within these urban campuses, fostering dynamic and collaborative environments.
ARE (Alexandria Real Estate Equities, Inc.) trades in the Real Estate sector, specifically REIT - Office, with a market capitalization of approximately $8.39B, a beta of 1.17 versus the broader market, a 52-week range of 39.41-88.24, average daily share volume of 2.0M, a public-listing history dating back to 1997, approximately 514 full-time employees. These structural characteristics shape how ARE stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.17 places ARE roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. ARE pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on ARE?
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.
ARE snapshot
As of August 14, 2026, spot at $48.36, ATM IV 36.60%, IV rank 26.37%, expected move 10.49%. The collar on ARE 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 63-day expiry.
Why this collar structure on ARE specifically: IV regime affects collar pricing on both sides; compressed ARE 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 $5.07 on the underlying). The 63-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated ARE expiries trade a higher absolute premium for lower per-day decay. Position sizing on ARE should anchor to the underlying notional of $48.36 per share and to the trader's directional view on ARE stock.
ARE collar setup
The ARE 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 ARE at $48.36 on that close, the first option leg uses a $50.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ARE chain at a 63-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 ARE shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $48.36 | long |
| Sell 1 | Call | $50.00 | $2.03 |
| Buy 1 | Put | $45.00 | $1.73 |
ARE collar risk and reward
- Net Premium / Debit
- -$4,806.00
- Max Profit (per contract)
- $194.00
- Max Loss (per contract)
- -$306.00
- Breakeven(s)
- $48.06
- Risk / Reward Ratio
- 0.634
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.
ARE collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on ARE. 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% | -$306.00 |
| $10.70 | -77.9% | -$306.00 |
| $21.39 | -55.8% | -$306.00 |
| $32.08 | -33.7% | -$306.00 |
| $42.78 | -11.5% | -$306.00 |
| $53.47 | +10.6% | +$194.00 |
| $64.16 | +32.7% | +$194.00 |
| $74.85 | +54.8% | +$194.00 |
| $85.54 | +76.9% | +$194.00 |
| $96.23 | +99.0% | +$194.00 |
When traders use collar on ARE
Collars on ARE hedge an existing long ARE 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.
ARE thesis for this collar
The market-implied 1-standard-deviation range for ARE extends from approximately $43.29 on the downside to $53.43 on the upside. A ARE collar hedges an existing long ARE 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 ARE IV rank near 26.37% 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 ARE at 36.60%. As a Real Estate name, ARE options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ARE-specific events.
ARE 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. ARE positions also carry Real Estate sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ARE alongside the broader basket even when ARE-specific fundamentals are unchanged. Always rebuild the position from current ARE chain quotes before placing a trade.
Frequently asked questions
- What is a collar on ARE?
- A collar on ARE is the collar strategy applied to ARE (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 ARE stock at $48.36 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed ARE chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are ARE 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 ARE collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 36.60%), the computed maximum profit is $194.00 per contract and the computed maximum loss is -$306.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a ARE collar?
- The breakeven for the ARE collar priced on this page is roughly $48.06 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 ARE market-implied 1-standard-deviation expected move in the same options snapshot 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 ARE?
- Collars on ARE hedge an existing long ARE 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 ARE implied volatility affect this collar?
- ARE ATM IV is at 36.60% with IV rank near 26.37%, 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.