FN Collar Strategy
FN (Fabrinet), in the Technology sector, (Hardware, Equipment & Parts industry), listed on NYSE.
Fabrinet provides optical packaging and precision optical, electro-mechanical, and electronic manufacturing services in North America, the Asia-Pacific, and Europe. The company offers a range of advanced optical and electro-mechanical capabilities in the manufacturing process, including process design and engineering, supply chain management, manufacturing, printed circuit board assembly, advanced packaging, integration, final assembly, and testing. Its products include switching products, including reconfigurable optical add-drop multiplexers, optical amplifiers, modulators, and other optical components and modules that enable network managers to route voice, video, and data communications traffic through fiber optic cables at various wavelengths, speeds, and over various distances. The company's products also comprise tunable lasers, transceivers, and transponders; and active optical cables, which provide high-speed interconnect capabilities for data centers and computing clusters, as well as Infiniband, Ethernet, fiber channel, and optical backplane connectivity. In addition, it provides solid state, diode-pumped, gas, and fiber lasers used in semiconductor processing, biotechnology and medical device, metrology, and material processing industries; and differential pressure, micro-gyro, fuel, and other sensors used in automobiles, as well as non-contact temperature measurement sensors for the medical industry. Further, the company designs and fabricates application-specific crystals, lenses, prisms, mirrors, laser components, and substrates; and other custom and standard borosilicate, clear fused quartz, and synthetic fused silica glass products.
FN (Fabrinet) trades in the Technology sector, specifically Hardware, Equipment & Parts, with a market capitalization of approximately $24.94B, a trailing P/E of 59.63, a beta of 1.22 versus the broader market, a 52-week range of 221.63-734.79, average daily share volume of 724K, a public-listing history dating back to 2010, approximately 14K full-time employees. These structural characteristics shape how FN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.22 places FN roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 59.63 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple.
What is a collar on FN?
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 FN snapshot
As of May 15, 2026, spot at $721.92, ATM IV 80.80%, IV rank 50.57%, expected move 23.16%. The collar on FN 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 FN specifically: IV regime affects collar pricing on both sides; mid-range FN IV at 80.80% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 23.16% (roughly $167.23 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 FN expiries trade a higher absolute premium for lower per-day decay. Position sizing on FN should anchor to the underlying notional of $721.92 per share and to the trader's directional view on FN stock.
FN collar setup
The FN 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 FN near $721.92, the first option leg uses a $760.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FN 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 FN shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $721.92 | long |
| Sell 1 | Call | $760.00 | $59.30 |
| Buy 1 | Put | $690.00 | $53.65 |
FN collar risk and reward
- Net Premium / Debit
- -$71,627.00
- Max Profit (per contract)
- $4,373.00
- Max Loss (per contract)
- -$2,627.00
- Breakeven(s)
- $716.27
- Risk / Reward Ratio
- 1.665
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.
FN collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on FN. 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% | -$2,627.00 |
| $159.63 | -77.9% | -$2,627.00 |
| $319.25 | -55.8% | -$2,627.00 |
| $478.87 | -33.7% | -$2,627.00 |
| $638.49 | -11.6% | -$2,627.00 |
| $798.11 | +10.6% | +$4,373.00 |
| $957.73 | +32.7% | +$4,373.00 |
| $1,117.35 | +54.8% | +$4,373.00 |
| $1,276.97 | +76.9% | +$4,373.00 |
| $1,436.58 | +99.0% | +$4,373.00 |
When traders use collar on FN
Collars on FN hedge an existing long FN 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.
FN thesis for this collar
The market-implied 1-standard-deviation range for FN extends from approximately $554.69 on the downside to $889.15 on the upside. A FN collar hedges an existing long FN 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 FN IV rank near 50.57% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on FN should anchor more to the directional view and the expected-move geometry. As a Technology name, FN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FN-specific events.
FN 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. FN positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FN alongside the broader basket even when FN-specific fundamentals are unchanged. Always rebuild the position from current FN chain quotes before placing a trade.
Frequently asked questions
- What is a collar on FN?
- A collar on FN is the collar strategy applied to FN (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 FN stock trading near $721.92, the strikes shown on this page are snapped to the nearest listed FN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FN 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 FN collar priced from the end-of-day chain at a 30-day expiry (ATM IV 80.80%), the computed maximum profit is $4,373.00 per contract and the computed maximum loss is -$2,627.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a FN collar?
- The breakeven for the FN collar priced on this page is roughly $716.27 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 FN market-implied 1-standard-deviation expected move is approximately 23.16%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on FN?
- Collars on FN hedge an existing long FN 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 FN implied volatility affect this collar?
- FN ATM IV is at 80.80% with IV rank near 50.57%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.