DXCM Collar Strategy
DXCM (DexCom, Inc.), in the Healthcare sector, (Medical - Devices industry), listed on NASDAQ.
DexCom, Inc., a medical device company, focuses on the design, development, and commercialization of continuous glucose monitoring (CGM) systems in the United States and internationally. The company provides its systems for use by people with diabetes, as well as for use by healthcare providers. Its products include DexCom G6, an integrated CGM system for diabetes management; Dexcom Real-Time API, which enables invited third-party developers to integrate real-time CGM data into their digital health applications and devices; Dexcom ONE, that is designed to replace finger stick blood glucose testing for diabetes treatment decisions; and Dexcom Share, a remote monitoring system. The company's products candidature comprises Dexcom G7, a next generation G7 CGM system. DexCom, Inc. has a collaboration and license agreement with Verily Life Sciences LLC and Verily Ireland Limited to develop blood-based or interstitial glucose monitoring products. The company markets its products directly to endocrinologists, physicians, and diabetes educators.
DXCM (DexCom, Inc.) trades in the Healthcare sector, specifically Medical - Devices, with a market capitalization of approximately $22.60B, a trailing P/E of 24.24, a beta of 1.40 versus the broader market, a 52-week range of 54.11-89.98, average daily share volume of 4.5M, a public-listing history dating back to 2005, approximately 10K full-time employees. These structural characteristics shape how DXCM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.40 indicates DXCM has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a collar on DXCM?
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 DXCM snapshot
As of May 15, 2026, spot at $61.55, ATM IV 40.94%, IV rank 25.17%, expected move 11.74%. The collar on DXCM 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 DXCM specifically: IV regime affects collar pricing on both sides; compressed DXCM IV at 40.94% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 11.74% (roughly $7.22 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 DXCM expiries trade a higher absolute premium for lower per-day decay. Position sizing on DXCM should anchor to the underlying notional of $61.55 per share and to the trader's directional view on DXCM stock.
DXCM collar setup
The DXCM 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 DXCM near $61.55, the first option leg uses a $65.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DXCM 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 DXCM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $61.55 | long |
| Sell 1 | Call | $65.00 | $1.48 |
| Buy 1 | Put | $58.00 | $1.53 |
DXCM collar risk and reward
- Net Premium / Debit
- -$6,160.00
- Max Profit (per contract)
- $340.00
- Max Loss (per contract)
- -$360.00
- Breakeven(s)
- $61.60
- Risk / Reward Ratio
- 0.944
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.
DXCM collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on DXCM. 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% | -$360.00 |
| $13.62 | -77.9% | -$360.00 |
| $27.23 | -55.8% | -$360.00 |
| $40.83 | -33.7% | -$360.00 |
| $54.44 | -11.5% | -$360.00 |
| $68.05 | +10.6% | +$340.00 |
| $81.66 | +32.7% | +$340.00 |
| $95.27 | +54.8% | +$340.00 |
| $108.87 | +76.9% | +$340.00 |
| $122.48 | +99.0% | +$340.00 |
When traders use collar on DXCM
Collars on DXCM hedge an existing long DXCM 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.
DXCM thesis for this collar
The market-implied 1-standard-deviation range for DXCM extends from approximately $54.33 on the downside to $68.77 on the upside. A DXCM collar hedges an existing long DXCM 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 DXCM IV rank near 25.17% 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 DXCM at 40.94%. As a Healthcare name, DXCM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DXCM-specific events.
DXCM 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. DXCM positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move DXCM alongside the broader basket even when DXCM-specific fundamentals are unchanged. Always rebuild the position from current DXCM chain quotes before placing a trade.
Frequently asked questions
- What is a collar on DXCM?
- A collar on DXCM is the collar strategy applied to DXCM (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 DXCM stock trading near $61.55, the strikes shown on this page are snapped to the nearest listed DXCM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are DXCM 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 DXCM collar priced from the end-of-day chain at a 30-day expiry (ATM IV 40.94%), the computed maximum profit is $340.00 per contract and the computed maximum loss is -$360.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a DXCM collar?
- The breakeven for the DXCM collar priced on this page is roughly $61.60 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 DXCM market-implied 1-standard-deviation expected move is approximately 11.74%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on DXCM?
- Collars on DXCM hedge an existing long DXCM 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 DXCM implied volatility affect this collar?
- DXCM ATM IV is at 40.94% with IV rank near 25.17%, 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.