FELE Collar Strategy
FELE (Franklin Electric Co., Inc.), in the Industrials sector, (Industrial - Machinery industry), listed on NASDAQ.
Franklin Electric Co., Inc., together with its subsidiaries, designs, manufactures, and distributes water and fuel pumping systems worldwide. It operates through three segments: Water Systems, Fueling Systems, and Distribution. The Water Systems segment offers submersible motors, pumps, drives, electronic controls, water treatment systems, monitoring devices, and related parts and equipment. Its motors and pumps are used principally for pumping clean water and wastewater in various residential, agricultural, municipal, and industrial applications; and manufactures electronic drives and controls that are used in motors for controlling functionality, as well as provides protection from various hazards, such as electrical surges, over-heating, and dry wells or tanks. The Fueling Systems segment provides pumps, pipes, sumps, fittings, vapor recovery components, electronic controls, monitoring devices, and related parts and equipment primarily for use in fueling system applications. This segment serves other energy markets, such as power reliability systems, as well as includes electronic devices for online monitoring of the power utility, hydroelectric, and telecommunication and data center infrastructure.
FELE (Franklin Electric Co., Inc.) trades in the Industrials sector, specifically Industrial - Machinery, with a market capitalization of approximately $4.30B, a trailing P/E of 28.60, a beta of 1.07 versus the broader market, a 52-week range of 83.42-111.53, average daily share volume of 344K, a public-listing history dating back to 1980, approximately 6K full-time employees. These structural characteristics shape how FELE stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.07 places FELE roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. FELE pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on FELE?
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 FELE snapshot
As of May 15, 2026, spot at $96.17, ATM IV 155.50%, IV rank 78.78%, expected move 44.58%. The collar on FELE 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 FELE specifically: IV regime affects collar pricing on both sides; elevated FELE IV at 155.50% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 44.58% (roughly $42.87 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 FELE expiries trade a higher absolute premium for lower per-day decay. Position sizing on FELE should anchor to the underlying notional of $96.17 per share and to the trader's directional view on FELE stock.
FELE collar setup
The FELE 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 FELE near $96.17, the first option leg uses a $100.98 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FELE 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 FELE shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $96.17 | long |
| Sell 1 | Call | $100.98 | N/A |
| Buy 1 | Put | $91.36 | N/A |
FELE 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.
FELE collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on FELE. 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 FELE
Collars on FELE hedge an existing long FELE 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.
FELE thesis for this collar
The market-implied 1-standard-deviation range for FELE extends from approximately $53.30 on the downside to $139.04 on the upside. A FELE collar hedges an existing long FELE 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 FELE IV rank near 78.78% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on FELE at 155.50%. As a Industrials name, FELE options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FELE-specific events.
FELE 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. FELE positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FELE alongside the broader basket even when FELE-specific fundamentals are unchanged. Always rebuild the position from current FELE chain quotes before placing a trade.
Frequently asked questions
- What is a collar on FELE?
- A collar on FELE is the collar strategy applied to FELE (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 FELE stock trading near $96.17, the strikes shown on this page are snapped to the nearest listed FELE chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FELE 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 FELE collar priced from the end-of-day chain at a 30-day expiry (ATM IV 155.50%), 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 FELE collar?
- The breakeven for the FELE 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 FELE market-implied 1-standard-deviation expected move is approximately 44.58%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on FELE?
- Collars on FELE hedge an existing long FELE 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 FELE implied volatility affect this collar?
- FELE ATM IV is at 155.50% with IV rank near 78.78%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.