EIX Collar Strategy
EIX (Edison International), in the Utilities sector, (Regulated Electric industry), listed on NYSE.
Edison International, through its subsidiaries, generates and distributes electric power. It delivers electricity to 15 million residential, commercial, industrial, public authorities, agricultural, and other customers across Southern, Central, and Coastal California. The company also provides energy solutions to commercial and industrial users. Its transmission facilities consist of lines ranging from 55 kV to 500 kV and substations; and distribution system consists of approximately 39,000 circuit-miles of overhead lines, approximately 31,000 circuit-miles of underground lines, and 800 substations. The company was founded in 1886 and is headquartered in Rosemead, California.
EIX (Edison International) trades in the Utilities sector, specifically Regulated Electric, with a market capitalization of approximately $27.17B, a trailing P/E of 7.35, a beta of 0.68 versus the broader market, a 52-week range of 47.73-76.22, average daily share volume of 3.2M, a public-listing history dating back to 1973, approximately 14K full-time employees. These structural characteristics shape how EIX stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.68 indicates EIX has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. The trailing P/E of 7.35 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. EIX pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on EIX?
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 EIX snapshot
As of May 15, 2026, spot at $69.22, ATM IV 27.70%, IV rank 14.38%, expected move 7.94%. The collar on EIX 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 63-day expiry.
Why this collar structure on EIX specifically: IV regime affects collar pricing on both sides; compressed EIX IV at 27.70% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 7.94% (roughly $5.50 on the underlying). The 63-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated EIX expiries trade a higher absolute premium for lower per-day decay. Position sizing on EIX should anchor to the underlying notional of $69.22 per share and to the trader's directional view on EIX stock.
EIX collar setup
The EIX 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 EIX near $69.22, the first option leg uses a $72.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed EIX chain at a 63-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 EIX shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $69.22 | long |
| Sell 1 | Call | $72.50 | $1.70 |
| Buy 1 | Put | $65.00 | $1.70 |
EIX collar risk and reward
- Net Premium / Debit
- -$6,922.00
- Max Profit (per contract)
- $328.00
- Max Loss (per contract)
- -$422.00
- Breakeven(s)
- $69.22
- Risk / Reward Ratio
- 0.777
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.
EIX collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on EIX. 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% | -$422.00 |
| $15.31 | -77.9% | -$422.00 |
| $30.62 | -55.8% | -$422.00 |
| $45.92 | -33.7% | -$422.00 |
| $61.23 | -11.5% | -$422.00 |
| $76.53 | +10.6% | +$328.00 |
| $91.83 | +32.7% | +$328.00 |
| $107.14 | +54.8% | +$328.00 |
| $122.44 | +76.9% | +$328.00 |
| $137.74 | +99.0% | +$328.00 |
When traders use collar on EIX
Collars on EIX hedge an existing long EIX 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.
EIX thesis for this collar
The market-implied 1-standard-deviation range for EIX extends from approximately $63.72 on the downside to $74.72 on the upside. A EIX collar hedges an existing long EIX 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 EIX IV rank near 14.38% 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 EIX at 27.70%. As a Utilities name, EIX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to EIX-specific events.
EIX 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. EIX positions also carry Utilities sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move EIX alongside the broader basket even when EIX-specific fundamentals are unchanged. Always rebuild the position from current EIX chain quotes before placing a trade.
Frequently asked questions
- What is a collar on EIX?
- A collar on EIX is the collar strategy applied to EIX (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 EIX stock trading near $69.22, the strikes shown on this page are snapped to the nearest listed EIX chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are EIX 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 EIX collar priced from the end-of-day chain at a 30-day expiry (ATM IV 27.70%), the computed maximum profit is $328.00 per contract and the computed maximum loss is -$422.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a EIX collar?
- The breakeven for the EIX collar priced on this page is roughly $69.22 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 EIX market-implied 1-standard-deviation expected move is approximately 7.94%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on EIX?
- Collars on EIX hedge an existing long EIX 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 EIX implied volatility affect this collar?
- EIX ATM IV is at 27.70% with IV rank near 14.38%, 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.