ELMD Collar Strategy
ELMD (Electromed, Inc.), in the Healthcare sector, (Medical - Devices industry), listed on AMEX.
Electromed, Inc. develops, manufactures, markets, and sells airway clearance therapy and related products that apply high frequency chest wall oscillation (HFCWO) therapy in pulmonary care for patients of various ages in the United States and internationally. The company offers SmartVest airway clearance system; SmartVest SQL System that consists of an inflatable therapy garment, a programmable air pulse generator, and a patented single-hose that delivers air pulses from the generator to the garment; and SmartVest Connect, a wireless technology with personalized HFCWO therapy management portal for patients with compromised pulmonary function. It also provides single patient use SmartVest and SmartVest Wrap products for health care providers in the acute care setting. The company offers its products primarily to home health care market for patients with bronchiectasis, cystic fibrosis, and neuromuscular disease. Electromed, Inc. markets its products primarily to physicians and health care providers, as well as directly to patients. The company was incorporated in 1992 and is headquartered in New Prague, Minnesota.
ELMD (Electromed, Inc.) trades in the Healthcare sector, specifically Medical - Devices, with a market capitalization of approximately $281.6M, a trailing P/E of 27.66, a beta of 0.39 versus the broader market, a 52-week range of 17.73-34.43, average daily share volume of 48K, a public-listing history dating back to 2010, approximately 174 full-time employees. These structural characteristics shape how ELMD stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.39 indicates ELMD has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure.
What is a collar on ELMD?
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 ELMD snapshot
As of May 15, 2026, spot at $35.42, ATM IV 61.80%, IV rank 27.80%, expected move 17.72%. The collar on ELMD 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 ELMD specifically: IV regime affects collar pricing on both sides; compressed ELMD IV at 61.80% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 17.72% (roughly $6.28 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 ELMD expiries trade a higher absolute premium for lower per-day decay. Position sizing on ELMD should anchor to the underlying notional of $35.42 per share and to the trader's directional view on ELMD stock.
ELMD collar setup
The ELMD 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 ELMD near $35.42, the first option leg uses a $37.19 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ELMD 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 ELMD shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $35.42 | long |
| Sell 1 | Call | $37.19 | N/A |
| Buy 1 | Put | $33.65 | N/A |
ELMD collar risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
ELMD collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on ELMD. 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.
When traders use collar on ELMD
Collars on ELMD hedge an existing long ELMD 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.
ELMD thesis for this collar
The market-implied 1-standard-deviation range for ELMD extends from approximately $29.14 on the downside to $41.70 on the upside. A ELMD collar hedges an existing long ELMD 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 ELMD IV rank near 27.80% 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 ELMD at 61.80%. As a Healthcare name, ELMD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ELMD-specific events.
ELMD 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. ELMD positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ELMD alongside the broader basket even when ELMD-specific fundamentals are unchanged. Always rebuild the position from current ELMD chain quotes before placing a trade.
Frequently asked questions
- What is a collar on ELMD?
- A collar on ELMD is the collar strategy applied to ELMD (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 ELMD stock trading near $35.42, the strikes shown on this page are snapped to the nearest listed ELMD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are ELMD 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 ELMD collar priced from the end-of-day chain at a 30-day expiry (ATM IV 61.80%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a ELMD collar?
- The breakeven for the ELMD collar priced on this page is no defined breakeven on the modeled curve 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 ELMD market-implied 1-standard-deviation expected move is approximately 17.72%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on ELMD?
- Collars on ELMD hedge an existing long ELMD 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 ELMD implied volatility affect this collar?
- ELMD ATM IV is at 61.80% with IV rank near 27.80%, 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.