How are BTU 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 BTU collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 51.63%), the computed maximum profit is $169.50 per contract and the computed maximum loss is -$130.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a BTU collar?

The breakeven for the BTU collar priced on this page is roughly $25.31 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 BTU market-implied 1-standard-deviation expected move in the same options snapshot is approximately 14.80%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current BTU implied volatility affect this collar?

BTU ATM IV is at 51.63% with IV rank near 11.63%, 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.

BTU Collar Strategy

BTU (Peabody Energy Corporation), in the Energy sector, (Coal industry), listed on NYSE.

Headquartered in St. Louis, Missouri, and founded in 1883, Peabody Energy Corporation operates as a prominent global entity in the coal mining sector. Its vast operations encompass the United States, Australia, Japan, India, China, and several other countries across Asia and beyond. The company organizes its extensive activities into key divisions: Seaborne Thermal Mining, Seaborne Metallurgical Mining, Powder River Basin Mining, and other U.S. Thermal Mining segments. Peabody's core business involves the extraction, processing, and sale of various types of coal.

BTU (Peabody Energy Corporation) trades in the Energy sector, specifically Coal, with a market capitalization of approximately $3.10B, a beta of 0.28 versus the broader market, a 52-week range of 15.67-41.14, average daily share volume of 3.1M, a public-listing history dating back to 2017, approximately 5K full-time employees. These structural characteristics shape how BTU stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.28 indicates BTU has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. BTU pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a collar on BTU?

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.

BTU snapshot

As of August 14, 2026, spot at $25.48, ATM IV 51.63%, IV rank 11.63%, expected move 14.80%. The collar on BTU 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 28-day expiry.

Why this collar structure on BTU specifically: IV regime affects collar pricing on both sides; compressed BTU IV at 51.63% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 14.80% (roughly $3.77 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 BTU expiries trade a higher absolute premium for lower per-day decay. Position sizing on BTU should anchor to the underlying notional of $25.48 per share and to the trader's directional view on BTU stock.

BTU collar setup

The BTU 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 BTU at $25.48 on that close, the first option leg uses a $27.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed BTU 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 BTU shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$25.48	long
Sell 1	Call	$27.00	$0.87
Buy 1	Put	$24.00	$0.70

BTU collar risk and reward

Net Premium / Debit: -$2,530.50
Max Profit (per contract): $169.50
Max Loss (per contract): -$130.50
Breakeven(s): $25.31
Risk / Reward Ratio: 1.299

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.

BTU collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on BTU. 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%	-$130.50
$5.64	-77.9%	-$130.50
$11.28	-55.7%	-$130.50
$16.91	-33.6%	-$130.50
$22.54	-11.5%	-$130.50
$28.17	+10.6%	+$169.50
$33.81	+32.7%	+$169.50
$39.44	+54.8%	+$169.50
$45.07	+76.9%	+$169.50
$50.70	+99.0%	+$169.50

When traders use collar on BTU

Collars on BTU hedge an existing long BTU 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.

BTU thesis for this collar

The market-implied 1-standard-deviation range for BTU extends from approximately $21.71 on the downside to $29.25 on the upside. A BTU collar hedges an existing long BTU 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 BTU IV rank near 11.63% 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 BTU at 51.63%. As a Energy name, BTU options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to BTU-specific events.

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

Frequently asked questions

What is a collar on BTU?: A collar on BTU is the collar strategy applied to BTU (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 BTU stock at $25.48 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed BTU chain strike and the premiums come straight from that session's bid/ask midpoint.
How are BTU 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 BTU collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 51.63%), the computed maximum profit is $169.50 per contract and the computed maximum loss is -$130.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a BTU collar?: The breakeven for the BTU collar priced on this page is roughly $25.31 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 BTU market-implied 1-standard-deviation expected move in the same options snapshot is approximately 14.80%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on BTU?: Collars on BTU hedge an existing long BTU 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 BTU implied volatility affect this collar?: BTU ATM IV is at 51.63% with IV rank near 11.63%, 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.