How are DAC 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 DAC collar priced from the end-of-day chain at a 30-day expiry (ATM IV 23.10%), the computed maximum profit is $409.00 per contract and the computed maximum loss is -$591.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a DAC collar?

The breakeven for the DAC collar priced on this page is roughly $130.91 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 DAC market-implied 1-standard-deviation expected move is approximately 6.62%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current DAC implied volatility affect this collar?

DAC ATM IV is at 23.10% with IV rank near 27.89%, 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.

DAC Collar Strategy

DAC (Danaos Corporation), in the Industrials sector, (Marine Shipping industry), listed on NYSE.

Danaos Corporation, together with its subsidiaries, owns and operates containerships in Australia, Asia, Europe, and the United States. The company offers seaborne transportation services, such as chartering its vessels to liner companies. As of February 28, 2022, it had a fleet of 71 containerships aggregating 436,589 twenty-foot equivalent units in capacity. The company was formerly known as Danaos Holdings Limited and changed its name to Danaos Corporation in October 2005. Danaos Corporation was founded in 1963 and is based in Piraeus, Greece.

DAC (Danaos Corporation) trades in the Industrials sector, specifically Marine Shipping, with a market capitalization of approximately $2.41B, a trailing P/E of 4.64, a beta of 0.90 versus the broader market, a 52-week range of 82.75-135.21, average daily share volume of 88K, a public-listing history dating back to 2006, approximately 4 full-time employees. These structural characteristics shape how DAC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.90 places DAC roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 4.64 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. DAC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a collar on DAC?

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 DAC snapshot

As of May 15, 2026, spot at $130.06, ATM IV 23.10%, IV rank 27.89%, expected move 6.62%. The collar on DAC 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 DAC specifically: IV regime affects collar pricing on both sides; compressed DAC IV at 23.10% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 6.62% (roughly $8.61 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 DAC expiries trade a higher absolute premium for lower per-day decay. Position sizing on DAC should anchor to the underlying notional of $130.06 per share and to the trader's directional view on DAC stock.

DAC collar setup

The DAC 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 DAC near $130.06, the first option leg uses a $135.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DAC 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 DAC shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$130.06	long
Sell 1	Call	$135.00	$1.33
Buy 1	Put	$125.00	$2.18

DAC collar risk and reward

Net Premium / Debit: -$13,091.00
Max Profit (per contract): $409.00
Max Loss (per contract): -$591.00
Breakeven(s): $130.91
Risk / Reward Ratio: 0.692

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.

DAC collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on DAC. 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%	-$591.00
$28.77	-77.9%	-$591.00
$57.52	-55.8%	-$591.00
$86.28	-33.7%	-$591.00
$115.03	-11.6%	-$591.00
$143.79	+10.6%	+$409.00
$172.55	+32.7%	+$409.00
$201.30	+54.8%	+$409.00
$230.06	+76.9%	+$409.00
$258.81	+99.0%	+$409.00

When traders use collar on DAC

Collars on DAC hedge an existing long DAC 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.

DAC thesis for this collar

The market-implied 1-standard-deviation range for DAC extends from approximately $121.45 on the downside to $138.67 on the upside. A DAC collar hedges an existing long DAC 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 DAC IV rank near 27.89% 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 DAC at 23.10%. As a Industrials name, DAC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DAC-specific events.

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

Frequently asked questions

What is a collar on DAC?: A collar on DAC is the collar strategy applied to DAC (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 DAC stock trading near $130.06, the strikes shown on this page are snapped to the nearest listed DAC chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are DAC 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 DAC collar priced from the end-of-day chain at a 30-day expiry (ATM IV 23.10%), the computed maximum profit is $409.00 per contract and the computed maximum loss is -$591.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a DAC collar?: The breakeven for the DAC collar priced on this page is roughly $130.91 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 DAC market-implied 1-standard-deviation expected move is approximately 6.62%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on DAC?: Collars on DAC hedge an existing long DAC 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 DAC implied volatility affect this collar?: DAC ATM IV is at 23.10% with IV rank near 27.89%, 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.