ELME Collar Strategy
ELME (Elme Communities), in the Real Estate sector, (REIT - Office industry), listed on NYSE.
Elme Communities is a prominent owner and operator of distinctive real estate assets strategically located throughout the Washington D.C. metropolitan region. Leveraging a foundation built on decades of deep experience, specialized expertise, and forward-thinking ambition, we excel at generating value by transforming keen market insights into actionable strategies and executing them effectively. As of October 29, 2020, our substantial portfolio comprised 45 diverse properties, featuring approximately 3.7 million square feet of commercial space alongside 6,863 multifamily apartment units. This collection includes 22 multifamily residential complexes, 15 office buildings, and 8 retail centers. Elme Communities' shares are publicly traded on the New York Stock Exchange (NYSE). Renowned for consistently delivering strong investor returns and ensuring stakeholder satisfaction, we have established ourselves as a trusted authority within one of the nation's most fiercely competitive real estate markets.
ELME (Elme Communities) trades in the Real Estate sector, specifically REIT - Office, with a market capitalization of approximately $131.5M, a beta of 0.77 versus the broader market, a 52-week range of 1.26-17.68, average daily share volume of 1.4M, a public-listing history dating back to 1980, approximately 255 full-time employees. These structural characteristics shape how ELME stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.77 places ELME roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. ELME pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on ELME?
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 ELME snapshot
As of June 30, 2026, spot at $1.50, ATM IV 21.50%, IV rank 3.40%, expected move 6.16%. The collar on ELME 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 17-day expiry.
Why this collar structure on ELME specifically: IV regime affects collar pricing on both sides; compressed ELME IV at 21.50% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 6.16% (roughly $0.09 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated ELME expiries trade a higher absolute premium for lower per-day decay. Position sizing on ELME should anchor to the underlying notional of $1.50 per share and to the trader's directional view on ELME stock.
ELME collar setup
The ELME 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 ELME near $1.50, the first option leg uses a $1.58 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ELME chain at a 17-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 ELME shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $1.50 | long |
| Sell 1 | Call | $1.58 | N/A |
| Buy 1 | Put | $1.42 | N/A |
ELME 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.
ELME collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on ELME. 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 ELME
Collars on ELME hedge an existing long ELME 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.
ELME thesis for this collar
The market-implied 1-standard-deviation range for ELME extends from approximately $1.41 on the downside to $1.59 on the upside. A ELME collar hedges an existing long ELME 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 ELME IV rank near 3.40% 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 ELME at 21.50%. As a Real Estate name, ELME options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ELME-specific events.
ELME 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. ELME positions also carry Real Estate sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ELME alongside the broader basket even when ELME-specific fundamentals are unchanged. Always rebuild the position from current ELME chain quotes before placing a trade.
Frequently asked questions
- What is a collar on ELME?
- A collar on ELME is the collar strategy applied to ELME (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 ELME stock trading near $1.50, the strikes shown on this page are snapped to the nearest listed ELME chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are ELME 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 ELME collar priced from the end-of-day chain at a 30-day expiry (ATM IV 21.50%), 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 ELME collar?
- The breakeven for the ELME 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 ELME market-implied 1-standard-deviation expected move is approximately 6.16%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on ELME?
- Collars on ELME hedge an existing long ELME 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 ELME implied volatility affect this collar?
- ELME ATM IV is at 21.50% with IV rank near 3.40%, 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.