FPI Collar Strategy
FPI (Farmland Partners Inc.), in the Real Estate sector, (REIT - Specialty industry), listed on NYSE.
Farmland Partners Inc. functions as an internally managed real estate enterprise, primarily focused on acquiring and holding premium North American agricultural land. The company also provides secured loans to farmers, collateralized by their farm real estate. As of the most recent disclosure, its expansive portfolio includes approximately 155,000 acres distributed across 16 U.S. states, covering significant agricultural areas from Alabama to Virginia. This diversified land base supports nearly 26 different crop varieties and is utilized by over 100 distinct agricultural tenants. Farmland Partners Inc. chose to be taxed as a Real Estate Investment Trust (REIT) for U.S. federal income tax purposes, commencing with the fiscal year that ended December 31, 2014.
FPI (Farmland Partners Inc.) trades in the Real Estate sector, specifically REIT - Specialty, with a market capitalization of approximately $432.2M, a trailing P/E of 14.20, a beta of 0.68 versus the broader market, a 52-week range of 9.365-13.225, average daily share volume of 362K, a public-listing history dating back to 2014, approximately 23 full-time employees. These structural characteristics shape how FPI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.68 indicates FPI has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. FPI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on FPI?
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 FPI snapshot
As of June 30, 2026, spot at $9.68, ATM IV 9.10%, IV rank 2.09%, expected move 2.61%. The collar on FPI 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 FPI specifically: IV regime affects collar pricing on both sides; compressed FPI IV at 9.10% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 2.61% (roughly $0.25 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 FPI expiries trade a higher absolute premium for lower per-day decay. Position sizing on FPI should anchor to the underlying notional of $9.68 per share and to the trader's directional view on FPI stock.
FPI collar setup
The FPI 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 FPI near $9.68, the first option leg uses a $10.16 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FPI 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 FPI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $9.68 | long |
| Sell 1 | Call | $10.16 | N/A |
| Buy 1 | Put | $9.20 | N/A |
FPI 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.
FPI collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on FPI. 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 FPI
Collars on FPI hedge an existing long FPI 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.
FPI thesis for this collar
The market-implied 1-standard-deviation range for FPI extends from approximately $9.43 on the downside to $9.93 on the upside. A FPI collar hedges an existing long FPI 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 FPI IV rank near 2.09% 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 FPI at 9.10%. As a Real Estate name, FPI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FPI-specific events.
FPI 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. FPI positions also carry Real Estate sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FPI alongside the broader basket even when FPI-specific fundamentals are unchanged. Always rebuild the position from current FPI chain quotes before placing a trade.
Frequently asked questions
- What is a collar on FPI?
- A collar on FPI is the collar strategy applied to FPI (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 FPI stock trading near $9.68, the strikes shown on this page are snapped to the nearest listed FPI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FPI 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 FPI collar priced from the end-of-day chain at a 30-day expiry (ATM IV 9.10%), 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 FPI collar?
- The breakeven for the FPI 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 FPI market-implied 1-standard-deviation expected move is approximately 2.61%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on FPI?
- Collars on FPI hedge an existing long FPI 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 FPI implied volatility affect this collar?
- FPI ATM IV is at 9.10% with IV rank near 2.09%, 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.