CVCO Collar Strategy
CVCO (Cavco Industries, Inc.), in the Consumer Cyclical sector, (Residential Construction industry), listed on NASDAQ.
Cavco Industries, Inc. (CVCO) is a prominent American enterprise primarily focused on the manufacturing, marketing, and retail sale of prefabricated residential dwellings. Its operations are structured into two core divisions: Factory-Built Housing, which handles construction, and Financial Services. The company offers its extensive range of manufactured homes under numerous recognized brand names, including Cavco, Fleetwood, Palm Harbor, Nationwide, Fairmont, Friendship, Chariot Eagle, Destiny, Commodore, Colony, Pennwest, R-Anell, Manorwood, and MidCountry. Beyond traditional homes, Cavco's production capabilities encompass recreational park model vehicles, vacation cabins, and various factory-built commercial structures. This commercial portfolio includes multi-unit apartment buildings, condominiums, hotels, temporary housing for workforces, educational facilities, and accommodations for U.S. military personnel. The firm further diversifies its offerings with an assortment of modular homes, featuring designs such as single and multi-section ranches, split-level residences, Cape Cod-style houses, two- and three-story structures, and multi-family units.
CVCO (Cavco Industries, Inc.) trades in the Consumer Cyclical sector, specifically Residential Construction, with a market capitalization of approximately $4.61B, a trailing P/E of 25.46, a beta of 1.28 versus the broader market, a 52-week range of 443.34-713.01, average daily share volume of 134K, a public-listing history dating back to 2003, approximately 8K full-time employees. These structural characteristics shape how CVCO stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.28 places CVCO roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a collar on CVCO?
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.
CVCO snapshot
As of August 14, 2026, spot at $604.75, ATM IV 35.60%, IV rank 21.51%, expected move 10.21%. The collar on CVCO 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 35-day expiry.
Why this collar structure on CVCO specifically: IV regime affects collar pricing on both sides; compressed CVCO IV at 35.60% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 10.21% (roughly $61.72 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated CVCO expiries trade a higher absolute premium for lower per-day decay. Position sizing on CVCO should anchor to the underlying notional of $604.75 per share and to the trader's directional view on CVCO stock.
CVCO collar setup
The CVCO 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 CVCO at $604.75 on that close, the first option leg uses a $630.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CVCO chain at a 35-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 CVCO shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $604.75 | long |
| Sell 1 | Call | $630.00 | $17.40 |
| Buy 1 | Put | $570.00 | $12.10 |
CVCO collar risk and reward
- Net Premium / Debit
- -$59,945.00
- Max Profit (per contract)
- $3,055.00
- Max Loss (per contract)
- -$2,945.00
- Breakeven(s)
- $599.45
- Risk / Reward Ratio
- 1.037
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.
CVCO collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on CVCO. 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% | -$2,945.00 |
| $133.72 | -77.9% | -$2,945.00 |
| $267.43 | -55.8% | -$2,945.00 |
| $401.15 | -33.7% | -$2,945.00 |
| $534.86 | -11.6% | -$2,945.00 |
| $668.57 | +10.6% | +$3,055.00 |
| $802.28 | +32.7% | +$3,055.00 |
| $936.00 | +54.8% | +$3,055.00 |
| $1,069.71 | +76.9% | +$3,055.00 |
| $1,203.42 | +99.0% | +$3,055.00 |
When traders use collar on CVCO
Collars on CVCO hedge an existing long CVCO 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.
CVCO thesis for this collar
The market-implied 1-standard-deviation range for CVCO extends from approximately $543.03 on the downside to $666.47 on the upside. A CVCO collar hedges an existing long CVCO 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 CVCO IV rank near 21.51% 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 CVCO at 35.60%. As a Consumer Cyclical name, CVCO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CVCO-specific events.
CVCO 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. CVCO positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move CVCO alongside the broader basket even when CVCO-specific fundamentals are unchanged. Always rebuild the position from current CVCO chain quotes before placing a trade.
Frequently asked questions
- What is a collar on CVCO?
- A collar on CVCO is the collar strategy applied to CVCO (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 CVCO stock at $604.75 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed CVCO chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are CVCO 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 CVCO collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 35.60%), the computed maximum profit is $3,055.00 per contract and the computed maximum loss is -$2,945.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a CVCO collar?
- The breakeven for the CVCO collar priced on this page is roughly $599.45 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 CVCO market-implied 1-standard-deviation expected move in the same options snapshot is approximately 10.21%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on CVCO?
- Collars on CVCO hedge an existing long CVCO 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 CVCO implied volatility affect this collar?
- CVCO ATM IV is at 35.60% with IV rank near 21.51%, 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.