CMP Collar Strategy
CMP (Compass Minerals International, Inc.), in the Basic Materials sector, (Industrial Materials industry), listed on NYSE.
Compass Minerals International, Inc., produces and sells essential minerals primarily in the United States, Canada, Brazil, the United Kingdom, and internationally. It operates through three segments: Salt, Plant Nutrition North America, and Plant Nutrition South America. The Salt segment offers sodium chloride and magnesium chloride, including rock salt, mechanically and solar evaporated salt, and brine and flake magnesium chloride products; and purchases potassium chloride and calcium chloride to sell as finished products or to blend with salt to produce specialty products. This segment provides products for use as a deicer for roadways, consumer, and professional use; as an ingredient in chemical production; for water treatment, human, and animal nutrition; and for various other consumer and industrial uses, as well as records management services. The Plant Nutrition North America segment offers sulfate of potash specialty fertilizers in various grades, including agricultural products that are used in broadcast spreaders, direct application, and liquid fertilizer solutions; turf products used by the turf and ornamental markets, as well as for blends used on golf course greens; organic products under the Protassium+ brand; and micronutrient products under the Wolf Trax and other brands. This segment provides its products to distributors and retailers of crop inputs, as well as growers.
CMP (Compass Minerals International, Inc.) trades in the Basic Materials sector, specifically Industrial Materials, with a market capitalization of approximately $1.27B, a trailing P/E of 179.15, a beta of 1.19 versus the broader market, a 52-week range of 16.4-31.02, average daily share volume of 596K, a public-listing history dating back to 2003, approximately 2K full-time employees. These structural characteristics shape how CMP stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.19 places CMP roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 179.15 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple. CMP pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on CMP?
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 CMP snapshot
As of May 15, 2026, spot at $29.55, ATM IV 49.50%, IV rank 19.86%, expected move 14.19%. The collar on CMP 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 CMP specifically: IV regime affects collar pricing on both sides; compressed CMP IV at 49.50% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 14.19% (roughly $4.19 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 CMP expiries trade a higher absolute premium for lower per-day decay. Position sizing on CMP should anchor to the underlying notional of $29.55 per share and to the trader's directional view on CMP stock.
CMP collar setup
The CMP 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 CMP near $29.55, the first option leg uses a $31.03 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CMP 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 CMP shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $29.55 | long |
| Sell 1 | Call | $31.03 | N/A |
| Buy 1 | Put | $28.07 | N/A |
CMP collar risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
CMP collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on CMP. 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.
When traders use collar on CMP
Collars on CMP hedge an existing long CMP 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.
CMP thesis for this collar
The market-implied 1-standard-deviation range for CMP extends from approximately $25.36 on the downside to $33.74 on the upside. A CMP collar hedges an existing long CMP 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 CMP IV rank near 19.86% 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 CMP at 49.50%. As a Basic Materials name, CMP options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CMP-specific events.
CMP 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. CMP positions also carry Basic Materials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move CMP alongside the broader basket even when CMP-specific fundamentals are unchanged. Always rebuild the position from current CMP chain quotes before placing a trade.
Frequently asked questions
- What is a collar on CMP?
- A collar on CMP is the collar strategy applied to CMP (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 CMP stock trading near $29.55, the strikes shown on this page are snapped to the nearest listed CMP chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are CMP 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 CMP collar priced from the end-of-day chain at a 30-day expiry (ATM IV 49.50%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a CMP collar?
- The breakeven for the CMP collar priced on this page is no defined breakeven on the modeled curve 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 CMP market-implied 1-standard-deviation expected move is approximately 14.19%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on CMP?
- Collars on CMP hedge an existing long CMP 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 CMP implied volatility affect this collar?
- CMP ATM IV is at 49.50% with IV rank near 19.86%, 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.