DG Collar Strategy
DG (Dollar General Corporation), in the Consumer Defensive sector, (Discount Stores industry), listed on NYSE.
Dollar General Corporation, a discount retailer, provides various merchandise products in the southern, southwestern, Midwestern, and eastern United States. It offers consumable products, including paper and cleaning products, such as paper towels, bath tissues, paper dinnerware, trash and storage bags, disinfectants, and laundry products; packaged food comprising cereals, pasta, canned soups, fruits and vegetables, condiments, spices, sugar, and flour; and perishables that include milk, eggs, bread, refrigerated and frozen food, beer, and wine. The company's consumable products also comprise snacks, such as candies, cookies, crackers, salty snacks, and carbonated beverages; health and beauty products, including over-the-counter medicines and personal care products, such as soaps, body washes, shampoos, cosmetics, and dental hygiene and foot care products; pet supplies and pet food; and tobacco products. In addition, it offers seasonal products comprising holiday items, toys, batteries, small electronics, greeting cards, stationery, prepaid phones and accessories, gardening supplies, hardware, and automotive and home office supplies; and home products that include kitchen supplies, cookware, small appliances, light bulbs, storage containers, frames, candles, craft supplies and kitchen, and bed and bath soft goods. Further, the company provides apparel, which comprise casual everyday apparel for infants, toddlers, girls, boys, women, and men, as well as socks, underwear, disposable diapers, shoes, and accessories. As of February 25, 2022, it operated 18,190 stores in 47 states in the United States.
DG (Dollar General Corporation) trades in the Consumer Defensive sector, specifically Discount Stores, with a market capitalization of approximately $22.41B, a trailing P/E of 14.81, a beta of 0.28 versus the broader market, a 52-week range of 86.25-158.23, average daily share volume of 3.2M, a public-listing history dating back to 2009, approximately 194K full-time employees. These structural characteristics shape how DG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.28 indicates DG has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. DG pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on DG?
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 DG snapshot
As of May 15, 2026, spot at $103.09, ATM IV 55.25%, IV rank 100.00%, expected move 15.84%. The collar on DG 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 28-day expiry.
Why this collar structure on DG specifically: IV regime affects collar pricing on both sides; elevated DG IV at 55.25% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 15.84% (roughly $16.33 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated DG expiries trade a higher absolute premium for lower per-day decay. Position sizing on DG should anchor to the underlying notional of $103.09 per share and to the trader's directional view on DG stock.
DG collar setup
The DG 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 DG near $103.09, the first option leg uses a $108.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DG chain at a 28-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 DG shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $103.09 | long |
| Sell 1 | Call | $108.00 | $4.55 |
| Buy 1 | Put | $98.00 | $3.98 |
DG collar risk and reward
- Net Premium / Debit
- -$10,251.50
- Max Profit (per contract)
- $548.50
- Max Loss (per contract)
- -$451.50
- Breakeven(s)
- $102.52
- Risk / Reward Ratio
- 1.215
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.
DG collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on DG. 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% | -$451.50 |
| $22.80 | -77.9% | -$451.50 |
| $45.60 | -55.8% | -$451.50 |
| $68.39 | -33.7% | -$451.50 |
| $91.18 | -11.6% | -$451.50 |
| $113.97 | +10.6% | +$548.50 |
| $136.77 | +32.7% | +$548.50 |
| $159.56 | +54.8% | +$548.50 |
| $182.35 | +76.9% | +$548.50 |
| $205.14 | +99.0% | +$548.50 |
When traders use collar on DG
Collars on DG hedge an existing long DG 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.
DG thesis for this collar
The market-implied 1-standard-deviation range for DG extends from approximately $86.76 on the downside to $119.42 on the upside. A DG collar hedges an existing long DG 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 DG 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 DG at 55.25%. As a Consumer Defensive name, DG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DG-specific events.
DG 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. DG positions also carry Consumer Defensive sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move DG alongside the broader basket even when DG-specific fundamentals are unchanged. Always rebuild the position from current DG chain quotes before placing a trade.
Frequently asked questions
- What is a collar on DG?
- A collar on DG is the collar strategy applied to DG (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 DG stock trading near $103.09, the strikes shown on this page are snapped to the nearest listed DG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are DG 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 DG collar priced from the end-of-day chain at a 30-day expiry (ATM IV 55.25%), the computed maximum profit is $548.50 per contract and the computed maximum loss is -$451.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a DG collar?
- The breakeven for the DG collar priced on this page is roughly $102.52 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 DG market-implied 1-standard-deviation expected move is approximately 15.84%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on DG?
- Collars on DG hedge an existing long DG 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 DG implied volatility affect this collar?
- DG ATM IV is at 55.25% 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.