CB Collar Strategy
CB (Chubb Limited), in the Financial Services sector, (Insurance - Property & Casualty industry), listed on NYSE.
Chubb Limited, headquartered in Zurich, Switzerland, is a global insurer and reinsurer, offering a broad spectrum of products across various markets. In North America, its Commercial Property & Casualty (P&C) division caters to businesses of all scales, from large corporations to small enterprises, providing a wide range of policies. These encompass commercial property, casualty, workers' compensation, package deals, risk management, financial lines, marine, construction, environmental, medical, cyber risk, surety, and excess casualty, alongside group accident and health insurance. The North America Personal P&C unit serves affluent individuals and high-net-worth families, delivering coverage for homeowners, automobiles (including collector vehicles), valuable possessions, personal and excess liability, travel, and recreational marine risks, complete with related services. Furthermore, its North American Agricultural Insurance arm specializes in multi-peril crop and crop-hail protection, as well as policies for farm and ranch properties and commercial agriculture. Internationally, the Overseas General Insurance segment provides traditional commercial P&C coverage and unique solutions in areas such as financial lines, marine, energy, aviation, political risk, and construction.
CB (Chubb Limited) trades in the Financial Services sector, specifically Insurance - Property & Casualty, with a market capitalization of approximately $132.43B, a trailing P/E of 11.92, a beta of 0.42 versus the broader market, a 52-week range of 264.1-345.67, average daily share volume of 1.6M, a public-listing history dating back to 1993, approximately 43K full-time employees. These structural characteristics shape how CB stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.42 indicates CB has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. The trailing P/E of 11.92 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. CB pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on CB?
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 CB snapshot
As of June 30, 2026, spot at $340.96, ATM IV 19.50%, IV rank 51.31%, expected move 5.59%. The collar on CB 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 CB specifically: IV regime affects collar pricing on both sides; mid-range CB IV at 19.50% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 5.59% (roughly $19.06 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 CB expiries trade a higher absolute premium for lower per-day decay. Position sizing on CB should anchor to the underlying notional of $340.96 per share and to the trader's directional view on CB stock.
CB collar setup
The CB 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 CB near $340.96, the first option leg uses a $360.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CB 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 CB shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $340.96 | long |
| Sell 1 | Call | $360.00 | $0.85 |
| Buy 1 | Put | $325.00 | $0.95 |
CB collar risk and reward
- Net Premium / Debit
- -$34,106.00
- Max Profit (per contract)
- $1,894.00
- Max Loss (per contract)
- -$1,606.00
- Breakeven(s)
- $341.06
- Risk / Reward Ratio
- 1.179
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.
CB collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on CB. 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% | -$1,606.00 |
| $75.40 | -77.9% | -$1,606.00 |
| $150.78 | -55.8% | -$1,606.00 |
| $226.17 | -33.7% | -$1,606.00 |
| $301.56 | -11.6% | -$1,606.00 |
| $376.95 | +10.6% | +$1,894.00 |
| $452.33 | +32.7% | +$1,894.00 |
| $527.72 | +54.8% | +$1,894.00 |
| $603.11 | +76.9% | +$1,894.00 |
| $678.49 | +99.0% | +$1,894.00 |
When traders use collar on CB
Collars on CB hedge an existing long CB 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.
CB thesis for this collar
The market-implied 1-standard-deviation range for CB extends from approximately $321.90 on the downside to $360.02 on the upside. A CB collar hedges an existing long CB 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 CB IV rank near 51.31% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on CB should anchor more to the directional view and the expected-move geometry. As a Financial Services name, CB options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CB-specific events.
CB 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. CB positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move CB alongside the broader basket even when CB-specific fundamentals are unchanged. Always rebuild the position from current CB chain quotes before placing a trade.
Frequently asked questions
- What is a collar on CB?
- A collar on CB is the collar strategy applied to CB (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 CB stock trading near $340.96, the strikes shown on this page are snapped to the nearest listed CB chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are CB 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 CB collar priced from the end-of-day chain at a 30-day expiry (ATM IV 19.50%), the computed maximum profit is $1,894.00 per contract and the computed maximum loss is -$1,606.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a CB collar?
- The breakeven for the CB collar priced on this page is roughly $341.06 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 CB market-implied 1-standard-deviation expected move is approximately 5.59%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on CB?
- Collars on CB hedge an existing long CB 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 CB implied volatility affect this collar?
- CB ATM IV is at 19.50% with IV rank near 51.31%, 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.