AVAV Collar Strategy
AVAV (AeroVironment, Inc.), in the Industrials sector, (Aerospace & Defense industry), listed on NASDAQ.
AeroVironment, Inc. designs, develops, produces, delivers, and supports a portfolio of robotic systems and related services for government agencies and businesses in the United States and internationally. It operates through four segments: Unmanned Aircraft Systems (UAS), Tactical Missile System (TMS), Medium Unmanned Aircraft Systems (MUAS), and High Altitude Pseudo-Satellite Systems (HAPS). The company supplies UAS, TMS, unmanned ground vehicle, and related services primarily to organizations within the U.S. Department of Defense and to international allied governments. It also designs, engineers, tools, and manufactures unmanned aerial and aircraft systems, including airborne platforms, payloads and payload integration, ground control systems, and ground support equipment and other items and services related to unmanned aircraft systems. In addition, the company offers small UAS products, including spare equipment, alternative payload modules, batteries, chargers, repair services, and customer support, as well as multiple aircraft, hand-held ground control system, and spare parts and accessories.
AVAV (AeroVironment, Inc.) trades in the Industrials sector, specifically Aerospace & Defense, with a market capitalization of approximately $8.04B, a beta of 1.36 versus the broader market, a 52-week range of 156-417.86, average daily share volume of 1.6M, a public-listing history dating back to 2007, approximately 1K full-time employees. These structural characteristics shape how AVAV stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.36 indicates AVAV has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a collar on AVAV?
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 AVAV snapshot
As of May 15, 2026, spot at $158.34, ATM IV 69.13%, IV rank 39.71%, expected move 19.82%. The collar on AVAV 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 28-day expiry.
Why this collar structure on AVAV specifically: IV regime affects collar pricing on both sides; mid-range AVAV IV at 69.13% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 19.82% (roughly $31.38 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated AVAV expiries trade a higher absolute premium for lower per-day decay. Position sizing on AVAV should anchor to the underlying notional of $158.34 per share and to the trader's directional view on AVAV stock.
AVAV collar setup
The AVAV 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 AVAV near $158.34, the first option leg uses a $165.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AVAV chain at a 28-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 AVAV shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $158.34 | long |
| Sell 1 | Call | $165.00 | $10.75 |
| Buy 1 | Put | $150.00 | $7.70 |
AVAV collar risk and reward
- Net Premium / Debit
- -$15,529.00
- Max Profit (per contract)
- $971.00
- Max Loss (per contract)
- -$529.00
- Breakeven(s)
- $155.29
- Risk / Reward Ratio
- 1.836
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.
AVAV collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on AVAV. 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% | -$529.00 |
| $35.02 | -77.9% | -$529.00 |
| $70.03 | -55.8% | -$529.00 |
| $105.04 | -33.7% | -$529.00 |
| $140.04 | -11.6% | -$529.00 |
| $175.05 | +10.6% | +$971.00 |
| $210.06 | +32.7% | +$971.00 |
| $245.07 | +54.8% | +$971.00 |
| $280.08 | +76.9% | +$971.00 |
| $315.09 | +99.0% | +$971.00 |
When traders use collar on AVAV
Collars on AVAV hedge an existing long AVAV 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.
AVAV thesis for this collar
The market-implied 1-standard-deviation range for AVAV extends from approximately $126.96 on the downside to $189.72 on the upside. A AVAV collar hedges an existing long AVAV 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 AVAV IV rank near 39.71% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on AVAV should anchor more to the directional view and the expected-move geometry. As a Industrials name, AVAV options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AVAV-specific events.
AVAV 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. AVAV positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move AVAV alongside the broader basket even when AVAV-specific fundamentals are unchanged. Always rebuild the position from current AVAV chain quotes before placing a trade.
Frequently asked questions
- What is a collar on AVAV?
- A collar on AVAV is the collar strategy applied to AVAV (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 AVAV stock trading near $158.34, the strikes shown on this page are snapped to the nearest listed AVAV chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are AVAV 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 AVAV collar priced from the end-of-day chain at a 30-day expiry (ATM IV 69.13%), the computed maximum profit is $971.00 per contract and the computed maximum loss is -$529.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a AVAV collar?
- The breakeven for the AVAV collar priced on this page is roughly $155.29 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 AVAV market-implied 1-standard-deviation expected move is approximately 19.82%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on AVAV?
- Collars on AVAV hedge an existing long AVAV 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 AVAV implied volatility affect this collar?
- AVAV ATM IV is at 69.13% with IV rank near 39.71%, 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.