ARWR Collar Strategy
ARWR (Arrowhead Pharmaceuticals, Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Arrowhead Pharmaceuticals, Inc., founded in 1989 and based in Pasadena, California, is a biopharmaceutical company dedicated to discovering and advancing innovative treatments for complex and challenging-to-treat diseases within the United States. The company's extensive therapeutic pipeline primarily leverages RNA interference (RNAi) technology. Among its advanced clinical programs are: ARO-AAT, a Phase II therapeutic targeting liver diseases associated with alpha-1 antitrypsin deficiency; ARO-APOC3, which is undergoing both Phase 2b and Phase 3 clinical evaluations for hypertriglyceridemia; ARO-ANG3, currently in Phase 2b development to reduce the production of angiopoietin-like protein 3; and ARO-HIF2, a Phase 1b candidate designed to treat clear cell renal cell carcinoma. Arrowhead also has several compounds in earlier clinical development, including ARO-HSD in Phase 1/2a for other liver diseases, ARO-ENaC in Phase 1/2a, aimed at decreasing the epithelial sodium channel alpha subunit in lung airways, and ARO-C3, also in Phase 1/2a, for complement-mediated diseases. Further expanding its diverse portfolio, the company is actively developing ARO-Lung2 for chronic obstructive pulmonary disorder (COPD), ARO-DUX4 for facioscapulohumeral muscular dystrophy, ARO-XDH for uncontrolled gout, and ARO-COV for COVID-19 and other pulmonary-borne pathogens. Beyond its core internal programs, Arrowhead is involved in the progression of JNJ-3989, a subcutaneously administered RNAi therapeutic for chronic hepatitis B virus infection; Olpasiran, intended to reduce apolipoprotein A production; and ARO-AMG1, which targets genetically validated cardiovascular pathways.
ARWR (Arrowhead Pharmaceuticals, Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $12.29B, a beta of 1.29 versus the broader market, a 52-week range of 18.14-95.49, average daily share volume of 2.1M, a public-listing history dating back to 1993, approximately 711 full-time employees. These structural characteristics shape how ARWR stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.29 places ARWR roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a collar on ARWR?
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.
ARWR snapshot
As of August 14, 2026, spot at $86.83, ATM IV 49.00%, IV rank 7.80%, expected move 14.05%. The collar on ARWR 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 ARWR specifically: IV regime affects collar pricing on both sides; compressed ARWR IV at 49.00% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 14.05% (roughly $12.20 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 ARWR expiries trade a higher absolute premium for lower per-day decay. Position sizing on ARWR should anchor to the underlying notional of $86.83 per share and to the trader's directional view on ARWR stock.
ARWR collar setup
The ARWR 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 ARWR at $86.83 on that close, the first option leg uses a $90.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ARWR 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 ARWR shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $86.83 | long |
| Sell 1 | Call | $90.00 | $3.95 |
| Buy 1 | Put | $82.50 | $3.35 |
ARWR collar risk and reward
- Net Premium / Debit
- -$8,623.00
- Max Profit (per contract)
- $377.00
- Max Loss (per contract)
- -$373.00
- Breakeven(s)
- $86.23
- Risk / Reward Ratio
- 1.011
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.
ARWR collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on ARWR. 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% | -$373.00 |
| $19.21 | -77.9% | -$373.00 |
| $38.40 | -55.8% | -$373.00 |
| $57.60 | -33.7% | -$373.00 |
| $76.80 | -11.6% | -$373.00 |
| $96.00 | +10.6% | +$377.00 |
| $115.19 | +32.7% | +$377.00 |
| $134.39 | +54.8% | +$377.00 |
| $153.59 | +76.9% | +$377.00 |
| $172.79 | +99.0% | +$377.00 |
When traders use collar on ARWR
Collars on ARWR hedge an existing long ARWR 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.
ARWR thesis for this collar
The market-implied 1-standard-deviation range for ARWR extends from approximately $74.63 on the downside to $99.03 on the upside. A ARWR collar hedges an existing long ARWR 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 ARWR IV rank near 7.80% 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 ARWR at 49.00%. As a Healthcare name, ARWR options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ARWR-specific events.
ARWR 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. ARWR positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ARWR alongside the broader basket even when ARWR-specific fundamentals are unchanged. Always rebuild the position from current ARWR chain quotes before placing a trade.
Frequently asked questions
- What is a collar on ARWR?
- A collar on ARWR is the collar strategy applied to ARWR (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 ARWR stock at $86.83 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed ARWR chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are ARWR 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 ARWR collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 49.00%), the computed maximum profit is $377.00 per contract and the computed maximum loss is -$373.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a ARWR collar?
- The breakeven for the ARWR collar priced on this page is roughly $86.23 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 ARWR market-implied 1-standard-deviation expected move in the same options snapshot is approximately 14.05%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on ARWR?
- Collars on ARWR hedge an existing long ARWR 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 ARWR implied volatility affect this collar?
- ARWR ATM IV is at 49.00% with IV rank near 7.80%, 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.