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 $11.11B, a beta of 1.28 versus the broader market, a 52-week range of 14.3-84.549, average daily share volume of 2.0M, a public-listing history dating back to 1993, approximately 609 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 1.28 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.
Current ARWR snapshot
As of June 30, 2026, spot at $82.74, ATM IV 57.60%, IV rank 25.22%, expected move 16.51%. The collar on ARWR 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 ARWR specifically: IV regime affects collar pricing on both sides; compressed ARWR IV at 57.60% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 16.51% (roughly $13.66 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 ARWR expiries trade a higher absolute premium for lower per-day decay. Position sizing on ARWR should anchor to the underlying notional of $82.74 per share and to the trader's directional view on ARWR stock.
ARWR collar setup
The ARWR 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 ARWR near $82.74, the first option leg uses a $87.50 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 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 ARWR shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $82.74 | long |
| Sell 1 | Call | $87.50 | $1.78 |
| Buy 1 | Put | $77.50 | $2.33 |
ARWR collar risk and reward
- Net Premium / Debit
- -$8,329.00
- Max Profit (per contract)
- $421.00
- Max Loss (per contract)
- -$579.00
- Breakeven(s)
- $83.29
- Risk / Reward Ratio
- 0.727
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% | -$579.00 |
| $18.30 | -77.9% | -$579.00 |
| $36.60 | -55.8% | -$579.00 |
| $54.89 | -33.7% | -$579.00 |
| $73.18 | -11.6% | -$579.00 |
| $91.48 | +10.6% | +$421.00 |
| $109.77 | +32.7% | +$421.00 |
| $128.06 | +54.8% | +$421.00 |
| $146.36 | +76.9% | +$421.00 |
| $164.65 | +99.0% | +$421.00 |
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 $69.08 on the downside to $96.40 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 25.22% 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 57.60%. 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 trading near $82.74, the strikes shown on this page are snapped to the nearest listed ARWR chain strike and the premiums come straight from the end-of-day 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 end-of-day chain at a 30-day expiry (ATM IV 57.60%), the computed maximum profit is $421.00 per contract and the computed maximum loss is -$579.00 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 $83.29 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 ARWR market-implied 1-standard-deviation expected move is approximately 16.51%; 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 57.60% with IV rank near 25.22%, 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.