How are CARG 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 CARG collar priced from the end-of-day chain at a 30-day expiry (ATM IV 41.10%), the computed maximum profit is $195.50 per contract and the computed maximum loss is -$204.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a CARG collar?

The breakeven for the CARG collar priced on this page is roughly $34.05 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 CARG market-implied 1-standard-deviation expected move is approximately 11.78%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current CARG implied volatility affect this collar?

CARG ATM IV is at 41.10% with IV rank near 25.68%, 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.

CARG Collar Strategy

CARG (CarGurus, Inc.), in the Consumer Cyclical sector, (Auto - Dealerships industry), listed on NASDAQ.

CarGurus, Inc., established in Boston, Massachusetts, in 2005, manages a prominent online ecosystem for vehicle transactions, serving both buyers and sellers across the United States and internationally. The company's operations are divided into two main segments: the U.S. Marketplace and Digital Wholesale. Essentially, CarGurus offers an expansive digital automotive marketplace where individuals can search for new and pre-owned vehicle listings from numerous dealerships. Simultaneously, it empowers dealers by linking them with a vast, engaged consumer base and supplying them with practical, data-driven market intelligence. The platform provides an array of specialized features to simplify the car buying and selling journey.

CARG (CarGurus, Inc.) trades in the Consumer Cyclical sector, specifically Auto - Dealerships, with a market capitalization of approximately $3.19B, a trailing P/E of 20.84, a beta of 1.21 versus the broader market, a 52-week range of 26.39-39.42, average daily share volume of 1.3M, a public-listing history dating back to 2017, approximately 1K full-time employees. These structural characteristics shape how CARG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.21 places CARG roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.

What is a collar on CARG?

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 CARG snapshot

As of June 30, 2026, spot at $33.97, ATM IV 41.10%, IV rank 25.68%, expected move 11.78%. The collar on CARG 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 CARG specifically: IV regime affects collar pricing on both sides; compressed CARG IV at 41.10% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 11.78% (roughly $4.00 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 CARG expiries trade a higher absolute premium for lower per-day decay. Position sizing on CARG should anchor to the underlying notional of $33.97 per share and to the trader's directional view on CARG stock.

CARG collar setup

The CARG 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 CARG near $33.97, the first option leg uses a $36.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CARG 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 CARG shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$33.97	long
Sell 1	Call	$36.00	$0.48
Buy 1	Put	$32.00	$0.55

CARG collar risk and reward

Net Premium / Debit: -$3,404.50
Max Profit (per contract): $195.50
Max Loss (per contract): -$204.50
Breakeven(s): $34.05
Risk / Reward Ratio: 0.956

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.

CARG collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on CARG. 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%	-$204.50
$7.52	-77.9%	-$204.50
$15.03	-55.8%	-$204.50
$22.54	-33.6%	-$204.50
$30.05	-11.5%	-$204.50
$37.56	+10.6%	+$195.50
$45.07	+32.7%	+$195.50
$52.58	+54.8%	+$195.50
$60.09	+76.9%	+$195.50
$67.60	+99.0%	+$195.50

When traders use collar on CARG

Collars on CARG hedge an existing long CARG 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.

CARG thesis for this collar

The market-implied 1-standard-deviation range for CARG extends from approximately $29.97 on the downside to $37.97 on the upside. A CARG collar hedges an existing long CARG 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 CARG IV rank near 25.68% 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 CARG at 41.10%. As a Consumer Cyclical name, CARG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CARG-specific events.

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

Frequently asked questions

What is a collar on CARG?: A collar on CARG is the collar strategy applied to CARG (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 CARG stock trading near $33.97, the strikes shown on this page are snapped to the nearest listed CARG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are CARG 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 CARG collar priced from the end-of-day chain at a 30-day expiry (ATM IV 41.10%), the computed maximum profit is $195.50 per contract and the computed maximum loss is -$204.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a CARG collar?: The breakeven for the CARG collar priced on this page is roughly $34.05 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 CARG market-implied 1-standard-deviation expected move is approximately 11.78%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on CARG?: Collars on CARG hedge an existing long CARG 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 CARG implied volatility affect this collar?: CARG ATM IV is at 41.10% with IV rank near 25.68%, 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.