How are BFAM 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 BFAM collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 36.80%), the computed maximum profit is $333.00 per contract and the computed maximum loss is -$167.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a BFAM collar?

The breakeven for the BFAM collar priced on this page is roughly $71.67 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 BFAM market-implied 1-standard-deviation expected move in the same options snapshot is approximately 10.55%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current BFAM implied volatility affect this collar?

BFAM ATM IV is at 36.80% with IV rank near 3.57%, 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.

BFAM Collar Strategy

BFAM (Bright Horizons Family Solutions Inc.), in the Industrials sector, (Specialty Business Services industry), listed on NYSE.

Bright Horizons Family Solutions Inc., established in 1986 and headquartered in Newton, Massachusetts, offers a comprehensive suite of early education, child care, and workplace solutions designed for employers and their employees' families. The company, known as Bright Horizons Solutions Corp. until its rebranding in July 2012, categorizes its services into three primary operational segments. The Full Service Center-Based Child Care segment delivers core child care provisions, alongside early childhood education, preschool programs, and elementary schooling. Through its Back-Up Care segment, the company provides flexible solutions for temporary or emergency care needs. This includes center-based back-up child care, in-home assistance for children or adult/elder dependents, dedicated school-age camps, remote tutoring, and reimbursed self-sourced care options. These services are facilitated through Bright Horizons' network of child care facilities, school-age campuses, and a pool of in-home caregivers.

BFAM (Bright Horizons Family Solutions Inc.) trades in the Industrials sector, specifically Specialty Business Services, with a market capitalization of approximately $3.76B, a trailing P/E of 21.04, a beta of 1.15 versus the broader market, a 52-week range of 57.63-124.25, average daily share volume of 1.1M, a public-listing history dating back to 2013, approximately 32K full-time employees. These structural characteristics shape how BFAM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.15 places BFAM roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.

What is a collar on BFAM?

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.

BFAM snapshot

As of August 14, 2026, spot at $71.32, ATM IV 36.80%, IV rank 3.57%, expected move 10.55%. The collar on BFAM 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 BFAM specifically: IV regime affects collar pricing on both sides; compressed BFAM IV at 36.80% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 10.55% (roughly $7.52 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 BFAM expiries trade a higher absolute premium for lower per-day decay. Position sizing on BFAM should anchor to the underlying notional of $71.32 per share and to the trader's directional view on BFAM stock.

BFAM collar setup

The BFAM 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 BFAM at $71.32 on that close, the first option leg uses a $75.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed BFAM 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 BFAM shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$71.32	long
Sell 1	Call	$75.00	$1.75
Buy 1	Put	$70.00	$2.10

BFAM collar risk and reward

Net Premium / Debit: -$7,167.00
Max Profit (per contract): $333.00
Max Loss (per contract): -$167.00
Breakeven(s): $71.67
Risk / Reward Ratio: 1.994

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.

BFAM collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on BFAM. 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.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$167.00
$15.78	-77.9%	-$167.00
$31.55	-55.8%	-$167.00
$47.31	-33.7%	-$167.00
$63.08	-11.5%	-$167.00
$78.85	+10.6%	+$333.00
$94.62	+32.7%	+$333.00
$110.39	+54.8%	+$333.00
$126.16	+76.9%	+$333.00
$141.92	+99.0%	+$333.00

When traders use collar on BFAM

Collars on BFAM hedge an existing long BFAM 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.

BFAM thesis for this collar

The market-implied 1-standard-deviation range for BFAM extends from approximately $63.80 on the downside to $78.84 on the upside. A BFAM collar hedges an existing long BFAM 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 BFAM IV rank near 3.57% 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 BFAM at 36.80%. As a Industrials name, BFAM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to BFAM-specific events.

BFAM 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. BFAM positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move BFAM alongside the broader basket even when BFAM-specific fundamentals are unchanged. Always rebuild the position from current BFAM chain quotes before placing a trade.

Frequently asked questions

What is a collar on BFAM?: A collar on BFAM is the collar strategy applied to BFAM (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 BFAM stock at $71.32 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed BFAM chain strike and the premiums come straight from that session's bid/ask midpoint.
How are BFAM 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 BFAM collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 36.80%), the computed maximum profit is $333.00 per contract and the computed maximum loss is -$167.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a BFAM collar?: The breakeven for the BFAM collar priced on this page is roughly $71.67 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 BFAM market-implied 1-standard-deviation expected move in the same options snapshot is approximately 10.55%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on BFAM?: Collars on BFAM hedge an existing long BFAM 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 BFAM implied volatility affect this collar?: BFAM ATM IV is at 36.80% with IV rank near 3.57%, 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.