FHN Collar Strategy
FHN (First Horizon Corporation), in the Financial Services sector, (Banks - Regional industry), listed on NYSE.
First Horizon Corporation operates as the bank holding company for First Horizon Bank that provides various financial services. The company operates through three segments: Regional Banking, Specialty Banking, and Corporate. It offers general banking services for consumers, businesses, financial institutions, and governments. The company also underwrites bank-eligible securities and other fixed-income securities eligible for underwriting by financial subsidiaries; sells loans and derivatives; and offers advisory services. In addition, it offers various services, such as mortgage banking; title insurance and loan-closing; brokerage; correspondent banking; nationwide check clearing and remittance processing; trust, fiduciary, and agency; equipment finance; and investment and financial advisory services. Further, the company sells mutual fund and retail insurance products; and credit cards.
FHN (First Horizon Corporation) trades in the Financial Services sector, specifically Banks - Regional, with a market capitalization of approximately $11.12B, a trailing P/E of 10.95, a beta of 0.63 versus the broader market, a 52-week range of 19.04-26.56, average daily share volume of 5.2M, a public-listing history dating back to 1980, approximately 7K full-time employees. These structural characteristics shape how FHN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.63 indicates FHN 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 10.95 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. FHN pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on FHN?
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 FHN snapshot
As of May 15, 2026, spot at $23.59, ATM IV 28.00%, IV rank 17.19%, expected move 8.03%. The collar on FHN 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 98-day expiry.
Why this collar structure on FHN specifically: IV regime affects collar pricing on both sides; compressed FHN IV at 28.00% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 8.03% (roughly $1.89 on the underlying). The 98-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated FHN expiries trade a higher absolute premium for lower per-day decay. Position sizing on FHN should anchor to the underlying notional of $23.59 per share and to the trader's directional view on FHN stock.
FHN collar setup
The FHN 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 FHN near $23.59, the first option leg uses a $25.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FHN chain at a 98-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 FHN shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $23.59 | long |
| Sell 1 | Call | $25.00 | $0.88 |
| Buy 1 | Put | $22.00 | $0.80 |
FHN collar risk and reward
- Net Premium / Debit
- -$2,351.50
- Max Profit (per contract)
- $148.50
- Max Loss (per contract)
- -$151.50
- Breakeven(s)
- $23.52
- Risk / Reward Ratio
- 0.980
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.
FHN collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on FHN. 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% | -$151.50 |
| $5.22 | -77.9% | -$151.50 |
| $10.44 | -55.7% | -$151.50 |
| $15.65 | -33.6% | -$151.50 |
| $20.87 | -11.5% | -$151.50 |
| $26.08 | +10.6% | +$148.50 |
| $31.30 | +32.7% | +$148.50 |
| $36.51 | +54.8% | +$148.50 |
| $41.73 | +76.9% | +$148.50 |
| $46.94 | +99.0% | +$148.50 |
When traders use collar on FHN
Collars on FHN hedge an existing long FHN 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.
FHN thesis for this collar
The market-implied 1-standard-deviation range for FHN extends from approximately $21.70 on the downside to $25.48 on the upside. A FHN collar hedges an existing long FHN 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 FHN IV rank near 17.19% 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 FHN at 28.00%. As a Financial Services name, FHN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FHN-specific events.
FHN 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. FHN positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FHN alongside the broader basket even when FHN-specific fundamentals are unchanged. Always rebuild the position from current FHN chain quotes before placing a trade.
Frequently asked questions
- What is a collar on FHN?
- A collar on FHN is the collar strategy applied to FHN (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 FHN stock trading near $23.59, the strikes shown on this page are snapped to the nearest listed FHN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FHN 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 FHN collar priced from the end-of-day chain at a 30-day expiry (ATM IV 28.00%), the computed maximum profit is $148.50 per contract and the computed maximum loss is -$151.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a FHN collar?
- The breakeven for the FHN collar priced on this page is roughly $23.52 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 FHN market-implied 1-standard-deviation expected move is approximately 8.03%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on FHN?
- Collars on FHN hedge an existing long FHN 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 FHN implied volatility affect this collar?
- FHN ATM IV is at 28.00% with IV rank near 17.19%, 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.