DRI Collar Strategy
DRI (Darden Restaurants, Inc.), in the Consumer Cyclical sector, (Restaurants industry), listed on NYSE.
Darden Restaurants, Inc., through its subsidiaries, owns and operates full-service restaurants in the United States and Canada. As of May 29, 2022, it owned and operated 1,867 restaurants, which included 884 under the Olive Garden brand, 546 under the LongHorn Steakhouse brand name, 172 under the Cheddar's Scratch Kitchen brand, 85 under the Yard House brand name, 62 under The Capital Grille brand, 45 under the Seasons 52 brand name, 42 under the Bahama Breeze brand, 28 under the Eddie V's Prime Seafood brand name, and 3 under the Capital Burger brand; and franchised 60 restaurants comprising 35 under the Olive Garden brand, 18 under the LongHorn Steakhouse brand name, 4 under the Cheddar's Scratch Kitchen brand, 2 under The Capital Grille brand name, and 1 under the Bahama Breeze brand.Darden Restaurants, Inc. was founded in 1968 and is based in Orlando, Florida.
DRI (Darden Restaurants, Inc.) trades in the Consumer Cyclical sector, specifically Restaurants, with a market capitalization of approximately $22.08B, a trailing P/E of 20.21, a beta of 0.59 versus the broader market, a 52-week range of 169-228.27, average daily share volume of 1.3M, a public-listing history dating back to 1995, approximately 191K full-time employees. These structural characteristics shape how DRI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.59 indicates DRI has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. DRI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on DRI?
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 DRI snapshot
As of May 15, 2026, spot at $196.82, ATM IV 30.80%, IV rank 31.13%, expected move 8.83%. The collar on DRI 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 DRI specifically: IV regime affects collar pricing on both sides; mid-range DRI IV at 30.80% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 8.83% (roughly $17.38 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 DRI expiries trade a higher absolute premium for lower per-day decay. Position sizing on DRI should anchor to the underlying notional of $196.82 per share and to the trader's directional view on DRI stock.
DRI collar setup
The DRI 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 DRI near $196.82, the first option leg uses a $210.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DRI 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 DRI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $196.82 | long |
| Sell 1 | Call | $210.00 | $2.33 |
| Buy 1 | Put | $185.00 | $2.90 |
DRI collar risk and reward
- Net Premium / Debit
- -$19,739.50
- Max Profit (per contract)
- $1,260.50
- Max Loss (per contract)
- -$1,239.50
- Breakeven(s)
- $197.40
- Risk / Reward Ratio
- 1.017
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.
DRI collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on DRI. 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% | -$1,239.50 |
| $43.53 | -77.9% | -$1,239.50 |
| $87.04 | -55.8% | -$1,239.50 |
| $130.56 | -33.7% | -$1,239.50 |
| $174.08 | -11.6% | -$1,239.50 |
| $217.59 | +10.6% | +$1,260.50 |
| $261.11 | +32.7% | +$1,260.50 |
| $304.63 | +54.8% | +$1,260.50 |
| $348.15 | +76.9% | +$1,260.50 |
| $391.66 | +99.0% | +$1,260.50 |
When traders use collar on DRI
Collars on DRI hedge an existing long DRI 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.
DRI thesis for this collar
The market-implied 1-standard-deviation range for DRI extends from approximately $179.44 on the downside to $214.20 on the upside. A DRI collar hedges an existing long DRI 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 DRI IV rank near 31.13% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on DRI should anchor more to the directional view and the expected-move geometry. As a Consumer Cyclical name, DRI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DRI-specific events.
DRI 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. DRI positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move DRI alongside the broader basket even when DRI-specific fundamentals are unchanged. Always rebuild the position from current DRI chain quotes before placing a trade.
Frequently asked questions
- What is a collar on DRI?
- A collar on DRI is the collar strategy applied to DRI (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 DRI stock trading near $196.82, the strikes shown on this page are snapped to the nearest listed DRI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are DRI 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 DRI collar priced from the end-of-day chain at a 30-day expiry (ATM IV 30.80%), the computed maximum profit is $1,260.50 per contract and the computed maximum loss is -$1,239.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a DRI collar?
- The breakeven for the DRI collar priced on this page is roughly $197.40 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 DRI market-implied 1-standard-deviation expected move is approximately 8.83%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on DRI?
- Collars on DRI hedge an existing long DRI 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 DRI implied volatility affect this collar?
- DRI ATM IV is at 30.80% with IV rank near 31.13%, 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.