BKR Collar Strategy
BKR (Baker Hughes Company), in the Energy sector, (Oil & Gas Equipment & Services industry), listed on NASDAQ.
Baker Hughes Company provides a portfolio of technologies and services to energy and industrial value chain worldwide. It operates through four segments: Oilfield Services (OFS), Oilfield Equipment (OFE), Turbomachinery & Process Solutions (TPS), and Digital Solutions (DS). The OFS segment offers exploration, drilling, wireline, evaluation, completion, production, and intervention services; and drilling and completions fluids, wireline services, downhole completion tools and systems, wellbore intervention tools and services, pressure pumping systems, oilfield and industrial chemicals, and artificial lift technologies for oil and natural gas, and oilfield service companies. The OFE segment provides subsea and surface wellheads, pressure control and production systems and services, flexible pipe systems for offshore and onshore applications, and life-of-field solutions, including well intervention and decommissioning solutions; and services related to onshore and offshore drilling and production operations. The TPS segment provides equipment and related services for mechanical-drive, compression, and power-generation applications across the oil and gas industry. Its product portfolio includes drivers, compressors, and turnkey solutions; and pumps, valves, and compressed natural gas and small-scale liquefied natural gas solutions.
BKR (Baker Hughes Company) trades in the Energy sector, specifically Oil & Gas Equipment & Services, with a market capitalization of approximately $64.89B, a trailing P/E of 20.78, a beta of 0.97 versus the broader market, a 52-week range of 35.83-70.41, average daily share volume of 9.2M, a public-listing history dating back to 1987, approximately 57K full-time employees. These structural characteristics shape how BKR stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.97 places BKR roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. BKR pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on BKR?
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 BKR snapshot
As of May 15, 2026, spot at $64.16, ATM IV 35.70%, IV rank 56.42%, expected move 10.23%. The collar on BKR 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 34-day expiry.
Why this collar structure on BKR specifically: IV regime affects collar pricing on both sides; mid-range BKR IV at 35.70% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 10.23% (roughly $6.57 on the underlying). The 34-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated BKR expiries trade a higher absolute premium for lower per-day decay. Position sizing on BKR should anchor to the underlying notional of $64.16 per share and to the trader's directional view on BKR stock.
BKR collar setup
The BKR 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 BKR near $64.16, the first option leg uses a $65.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed BKR chain at a 34-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 BKR shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $64.16 | long |
| Sell 1 | Call | $65.00 | $2.55 |
| Buy 1 | Put | $60.00 | $1.15 |
BKR collar risk and reward
- Net Premium / Debit
- -$6,276.00
- Max Profit (per contract)
- $224.00
- Max Loss (per contract)
- -$276.00
- Breakeven(s)
- $62.76
- Risk / Reward Ratio
- 0.812
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.
BKR collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on BKR. 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% | -$276.00 |
| $14.20 | -77.9% | -$276.00 |
| $28.38 | -55.8% | -$276.00 |
| $42.57 | -33.7% | -$276.00 |
| $56.75 | -11.5% | -$276.00 |
| $70.94 | +10.6% | +$224.00 |
| $85.12 | +32.7% | +$224.00 |
| $99.31 | +54.8% | +$224.00 |
| $113.49 | +76.9% | +$224.00 |
| $127.68 | +99.0% | +$224.00 |
When traders use collar on BKR
Collars on BKR hedge an existing long BKR 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.
BKR thesis for this collar
The market-implied 1-standard-deviation range for BKR extends from approximately $57.59 on the downside to $70.73 on the upside. A BKR collar hedges an existing long BKR 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 BKR IV rank near 56.42% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on BKR should anchor more to the directional view and the expected-move geometry. As a Energy name, BKR options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to BKR-specific events.
BKR 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. BKR positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move BKR alongside the broader basket even when BKR-specific fundamentals are unchanged. Always rebuild the position from current BKR chain quotes before placing a trade.
Frequently asked questions
- What is a collar on BKR?
- A collar on BKR is the collar strategy applied to BKR (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 BKR stock trading near $64.16, the strikes shown on this page are snapped to the nearest listed BKR chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are BKR 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 BKR collar priced from the end-of-day chain at a 30-day expiry (ATM IV 35.70%), the computed maximum profit is $224.00 per contract and the computed maximum loss is -$276.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a BKR collar?
- The breakeven for the BKR collar priced on this page is roughly $62.76 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 BKR market-implied 1-standard-deviation expected move is approximately 10.23%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on BKR?
- Collars on BKR hedge an existing long BKR 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 BKR implied volatility affect this collar?
- BKR ATM IV is at 35.70% with IV rank near 56.42%, 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.