DGX Collar Strategy
DGX (Quest Diagnostics Incorporated), in the Healthcare sector, (Medical - Diagnostics & Research industry), listed on NYSE.
Quest Diagnostics Incorporated, founded in 1967 and headquartered in Secaucus, New Jersey, is a premier provider of diagnostic testing, information, and related services, serving clients both domestically and internationally. Its core business involves the development and provision of diverse diagnostic information services, such as routine, advanced clinical, and anatomic pathology testing. While primarily operating under the Quest Diagnostics brand, it also leverages specialized identities like AmeriPath, Dermpath Diagnostics, ExamOne, and Quanum to reach a broad spectrum of clients. Its extensive client base includes patients, clinicians, hospitals, integrated delivery networks, health plans, employers, and other direct healthcare entities. Delivery of these services is facilitated through a robust network comprising laboratories, patient service centers, in-office phlebotomists, call centers, and mobile health professionals including paramedics and nurses. Additionally, the company provides risk assessment services for the life insurance industry and offers comprehensive information technology solutions to healthcare organizations and clinicians.
DGX (Quest Diagnostics Incorporated) trades in the Healthcare sector, specifically Medical - Diagnostics & Research, with a market capitalization of approximately $23.23B, a trailing P/E of 22.55, a beta of 0.59 versus the broader market, a 52-week range of 164.65-213.5, average daily share volume of 910K, a public-listing history dating back to 1996, approximately 55K full-time employees. These structural characteristics shape how DGX stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.59 indicates DGX has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. DGX pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on DGX?
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 DGX snapshot
As of June 29, 2026, spot at $211.07, ATM IV 22.00%, IV rank 30.45%, expected move 6.31%. The collar on DGX 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 18-day expiry.
Why this collar structure on DGX specifically: IV regime affects collar pricing on both sides; mid-range DGX IV at 22.00% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 6.31% (roughly $13.31 on the underlying). The 18-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated DGX expiries trade a higher absolute premium for lower per-day decay. Position sizing on DGX should anchor to the underlying notional of $211.07 per share and to the trader's directional view on DGX stock.
DGX collar setup
The DGX 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 DGX near $211.07, the first option leg uses a $220.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DGX chain at a 18-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 DGX shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $211.07 | long |
| Sell 1 | Call | $220.00 | $1.00 |
| Buy 1 | Put | $200.00 | $1.00 |
DGX collar risk and reward
- Net Premium / Debit
- -$21,107.00
- Max Profit (per contract)
- $893.00
- Max Loss (per contract)
- -$1,107.00
- Breakeven(s)
- $211.07
- Risk / Reward Ratio
- 0.807
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.
DGX collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on DGX. 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% | -$1,107.00 |
| $46.68 | -77.9% | -$1,107.00 |
| $93.35 | -55.8% | -$1,107.00 |
| $140.01 | -33.7% | -$1,107.00 |
| $186.68 | -11.6% | -$1,107.00 |
| $233.35 | +10.6% | +$893.00 |
| $280.02 | +32.7% | +$893.00 |
| $326.68 | +54.8% | +$893.00 |
| $373.35 | +76.9% | +$893.00 |
| $420.02 | +99.0% | +$893.00 |
When traders use collar on DGX
Collars on DGX hedge an existing long DGX 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.
DGX thesis for this collar
The market-implied 1-standard-deviation range for DGX extends from approximately $197.76 on the downside to $224.38 on the upside. A DGX collar hedges an existing long DGX 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 DGX IV rank near 30.45% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on DGX should anchor more to the directional view and the expected-move geometry. As a Healthcare name, DGX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DGX-specific events.
DGX 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. DGX positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move DGX alongside the broader basket even when DGX-specific fundamentals are unchanged. Always rebuild the position from current DGX chain quotes before placing a trade.
Frequently asked questions
- What is a collar on DGX?
- A collar on DGX is the collar strategy applied to DGX (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 DGX stock trading near $211.07, the strikes shown on this page are snapped to the nearest listed DGX chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are DGX 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 DGX collar priced from the end-of-day chain at a 30-day expiry (ATM IV 22.00%), the computed maximum profit is $893.00 per contract and the computed maximum loss is -$1,107.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a DGX collar?
- The breakeven for the DGX collar priced on this page is roughly $211.07 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 DGX market-implied 1-standard-deviation expected move is approximately 6.31%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on DGX?
- Collars on DGX hedge an existing long DGX 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 DGX implied volatility affect this collar?
- DGX ATM IV is at 22.00% with IV rank near 30.45%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.