ESNT Collar Strategy
ESNT (Essent Group Ltd.), in the Financial Services sector, (Insurance - Specialty industry), listed on NYSE.
Essent Group Ltd., through its subsidiaries, provides private mortgage insurance and reinsurance for mortgages secured by residential properties located in the United States. Its mortgage insurance products include primary, pool, and master policy. The company also provides information technology maintenance and development services; customer support-related services; underwriting consulting; and contract underwriting services. It serves the originators of residential mortgage loans, such as regulated depository institutions, mortgage banks, credit unions, and other lenders. The company was founded in 2008 and is based in Hamilton, Bermuda.
ESNT (Essent Group Ltd.) trades in the Financial Services sector, specifically Insurance - Specialty, with a market capitalization of approximately $5.52B, a trailing P/E of 8.19, a beta of 0.81 versus the broader market, a 52-week range of 55.22-67.09, average daily share volume of 853K, a public-listing history dating back to 2013, approximately 555 full-time employees. These structural characteristics shape how ESNT stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.81 places ESNT roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 8.19 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. ESNT pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on ESNT?
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 ESNT snapshot
As of May 15, 2026, spot at $60.59, ATM IV 17.30%, IV rank 5.70%, expected move 4.96%. The collar on ESNT 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 ESNT specifically: IV regime affects collar pricing on both sides; compressed ESNT IV at 17.30% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 4.96% (roughly $3.01 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 ESNT expiries trade a higher absolute premium for lower per-day decay. Position sizing on ESNT should anchor to the underlying notional of $60.59 per share and to the trader's directional view on ESNT stock.
ESNT collar setup
The ESNT 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 ESNT near $60.59, the first option leg uses a $63.62 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ESNT 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 ESNT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $60.59 | long |
| Sell 1 | Call | $63.62 | N/A |
| Buy 1 | Put | $57.56 | N/A |
ESNT 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.
ESNT collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on ESNT. 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 ESNT
Collars on ESNT hedge an existing long ESNT 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.
ESNT thesis for this collar
The market-implied 1-standard-deviation range for ESNT extends from approximately $57.58 on the downside to $63.60 on the upside. A ESNT collar hedges an existing long ESNT 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 ESNT IV rank near 5.70% 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 ESNT at 17.30%. As a Financial Services name, ESNT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ESNT-specific events.
ESNT 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. ESNT positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ESNT alongside the broader basket even when ESNT-specific fundamentals are unchanged. Always rebuild the position from current ESNT chain quotes before placing a trade.
Frequently asked questions
- What is a collar on ESNT?
- A collar on ESNT is the collar strategy applied to ESNT (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 ESNT stock trading near $60.59, the strikes shown on this page are snapped to the nearest listed ESNT chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are ESNT 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 ESNT collar priced from the end-of-day chain at a 30-day expiry (ATM IV 17.30%), 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 ESNT collar?
- The breakeven for the ESNT 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 ESNT market-implied 1-standard-deviation expected move is approximately 4.96%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on ESNT?
- Collars on ESNT hedge an existing long ESNT 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 ESNT implied volatility affect this collar?
- ESNT ATM IV is at 17.30% with IV rank near 5.70%, 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.