How are DCI 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 DCI collar priced from the end-of-day chain at a 30-day expiry (ATM IV 474.20%), the computed maximum profit is $525.00 per contract and the computed maximum loss is -$475.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a DCI collar?

The breakeven for the DCI collar priced on this page is roughly $89.75 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 DCI market-implied 1-standard-deviation expected move is approximately 135.95%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current DCI implied volatility affect this collar?

DCI ATM IV is at 474.20% with IV rank near 100.00%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.

DCI Collar Strategy

DCI (Donaldson Company, Inc.), in the Industrials sector, (Industrial - Machinery industry), listed on NYSE.

Donaldson Company, Inc. (DCI) is a global enterprise that develops, manufactures, and distributes an extensive range of filtration systems and their corresponding replacement parts. The company's operations are strategically divided into two core business units: Engine Products and Industrial Products. The Engine Products division provides a variety of solutions, including replacement filters for both air and liquid filtration needs, comprehensive air filtration systems, and specialized liquid filtration systems designed for fuel, lubrication, and hydraulic applications. This segment also offers exhaust and emissions control technologies, alongside a suite of sensors, indicators, and monitoring systems. Its clientele primarily consists of Original Equipment Manufacturers (OEMs) within the construction, mining, agriculture, aerospace, defense, and transportation industries. Additionally, it caters to the aftermarket through independent distributors, OEM dealership networks, private label accounts, and major fleet operators.

DCI (Donaldson Company, Inc.) trades in the Industrials sector, specifically Industrial - Machinery, with a market capitalization of approximately $10.26B, a trailing P/E of 23.38, a beta of 0.96 versus the broader market, a 52-week range of 68.96-112.84, average daily share volume of 713K, a public-listing history dating back to 1980, approximately 14K full-time employees. These structural characteristics shape how DCI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.96 places DCI roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. DCI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a collar on DCI?

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 DCI snapshot

As of June 30, 2026, spot at $89.50, ATM IV 474.20%, IV rank 100.00%, expected move 135.95%. The collar on DCI 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 52-day expiry.

Why this collar structure on DCI specifically: IV regime affects collar pricing on both sides; elevated DCI IV at 474.20% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 135.95% (roughly $121.67 on the underlying). The 52-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated DCI expiries trade a higher absolute premium for lower per-day decay. Position sizing on DCI should anchor to the underlying notional of $89.50 per share and to the trader's directional view on DCI stock.

DCI collar setup

The DCI 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 DCI near $89.50, the first option leg uses a $95.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DCI chain at a 52-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 DCI shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$89.50	long
Sell 1	Call	$95.00	$1.75
Buy 1	Put	$85.00	$2.00

DCI collar risk and reward

Net Premium / Debit: -$8,975.00
Max Profit (per contract): $525.00
Max Loss (per contract): -$475.00
Breakeven(s): $89.75
Risk / Reward Ratio: 1.105

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.

DCI collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on DCI. 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.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$475.00
$19.80	-77.9%	-$475.00
$39.59	-55.8%	-$475.00
$59.37	-33.7%	-$475.00
$79.16	-11.6%	-$475.00
$98.95	+10.6%	+$525.00
$118.74	+32.7%	+$525.00
$138.52	+54.8%	+$525.00
$158.31	+76.9%	+$525.00
$178.10	+99.0%	+$525.00

When traders use collar on DCI

Collars on DCI hedge an existing long DCI 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.

DCI thesis for this collar

The market-implied 1-standard-deviation range for DCI extends from approximately $-32.17 on the downside to $211.17 on the upside. A DCI collar hedges an existing long DCI 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 DCI IV rank near 100.00% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on DCI at 474.20%. As a Industrials name, DCI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DCI-specific events.

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

Frequently asked questions

What is a collar on DCI?: A collar on DCI is the collar strategy applied to DCI (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 DCI stock trading near $89.50, the strikes shown on this page are snapped to the nearest listed DCI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are DCI 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 DCI collar priced from the end-of-day chain at a 30-day expiry (ATM IV 474.20%), the computed maximum profit is $525.00 per contract and the computed maximum loss is -$475.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a DCI collar?: The breakeven for the DCI collar priced on this page is roughly $89.75 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 DCI market-implied 1-standard-deviation expected move is approximately 135.95%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on DCI?: Collars on DCI hedge an existing long DCI 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 DCI implied volatility affect this collar?: DCI ATM IV is at 474.20% with IV rank near 100.00%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.