How are CHDN 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 CHDN collar priced from the end-of-day chain at a 30-day expiry (ATM IV 34.20%), the computed maximum profit is $460.00 per contract and the computed maximum loss is -$540.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a CHDN collar?

The breakeven for the CHDN collar priced on this page is roughly $85.40 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 CHDN market-implied 1-standard-deviation expected move is approximately 9.80%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current CHDN implied volatility affect this collar?

CHDN ATM IV is at 34.20% with IV rank near 51.47%, 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.

CHDN Collar Strategy

CHDN (Churchill Downs Incorporated), in the Consumer Cyclical sector, (Gambling, Resorts & Casinos industry), listed on NASDAQ.

Churchill Downs Incorporated operates as a racing, online wagering, and gaming entertainment company in the United States. It operates through three segments: Live and Historical Racing, TwinSpires, and Gaming. As of December 31, 2021, the company owned and operated three pari-mutuel gaming entertainment venues with approximately 3,050 historical racing machines (HRMs) in Kentucky; TwinSpires, an online wagering platform for horse racing, sports, and iGaming; nine retail sportsbooks; and casino gaming in eight states with approximately 11,000 slot machines and video lottery terminals, and 200 table games. It also offers streaming video of live horse races, replays, and an assortment of racing and handicapping information; and provides the Bloodstock Research Information Services platform for horse racing statistical data. In addition, the company manufactures and operates pari-mutuel wagering systems for racetracks, off-track betting facilities, and other pari-mutuel wagering businesses. Churchill Downs Incorporated was founded in 1875 and is headquartered in Louisville, Kentucky.

CHDN (Churchill Downs Incorporated) trades in the Consumer Cyclical sector, specifically Gambling, Resorts & Casinos, with a market capitalization of approximately $5.96B, a trailing P/E of 15.53, a beta of 0.73 versus the broader market, a 52-week range of 80.24-118.46, average daily share volume of 1.1M, a public-listing history dating back to 1993, approximately 6K full-time employees. These structural characteristics shape how CHDN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.73 places CHDN roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. CHDN pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a collar on CHDN?

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 CHDN snapshot

As of May 15, 2026, spot at $86.65, ATM IV 34.20%, IV rank 51.47%, expected move 9.80%. The collar on CHDN 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 CHDN specifically: IV regime affects collar pricing on both sides; mid-range CHDN IV at 34.20% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 9.80% (roughly $8.50 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 CHDN expiries trade a higher absolute premium for lower per-day decay. Position sizing on CHDN should anchor to the underlying notional of $86.65 per share and to the trader's directional view on CHDN stock.

CHDN collar setup

The CHDN 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 CHDN near $86.65, the first option leg uses a $90.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CHDN 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 CHDN shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$86.65	long
Sell 1	Call	$90.00	$2.50
Buy 1	Put	$80.00	$1.25

CHDN collar risk and reward

Net Premium / Debit: -$8,540.00
Max Profit (per contract): $460.00
Max Loss (per contract): -$540.00
Breakeven(s): $85.40
Risk / Reward Ratio: 0.852

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.

CHDN collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on CHDN. 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%	-$540.00
$19.17	-77.9%	-$540.00
$38.33	-55.8%	-$540.00
$57.48	-33.7%	-$540.00
$76.64	-11.6%	-$540.00
$95.80	+10.6%	+$460.00
$114.96	+32.7%	+$460.00
$134.11	+54.8%	+$460.00
$153.27	+76.9%	+$460.00
$172.43	+99.0%	+$460.00

When traders use collar on CHDN

Collars on CHDN hedge an existing long CHDN 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.

CHDN thesis for this collar

The market-implied 1-standard-deviation range for CHDN extends from approximately $78.15 on the downside to $95.15 on the upside. A CHDN collar hedges an existing long CHDN 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 CHDN IV rank near 51.47% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on CHDN should anchor more to the directional view and the expected-move geometry. As a Consumer Cyclical name, CHDN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CHDN-specific events.

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

Frequently asked questions

What is a collar on CHDN?: A collar on CHDN is the collar strategy applied to CHDN (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 CHDN stock trading near $86.65, the strikes shown on this page are snapped to the nearest listed CHDN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are CHDN 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 CHDN collar priced from the end-of-day chain at a 30-day expiry (ATM IV 34.20%), the computed maximum profit is $460.00 per contract and the computed maximum loss is -$540.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a CHDN collar?: The breakeven for the CHDN collar priced on this page is roughly $85.40 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 CHDN market-implied 1-standard-deviation expected move is approximately 9.80%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on CHDN?: Collars on CHDN hedge an existing long CHDN 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 CHDN implied volatility affect this collar?: CHDN ATM IV is at 34.20% with IV rank near 51.47%, 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.