How are GD 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 GD collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 17.43%), the computed maximum profit is $1,961.00 per contract and the computed maximum loss is -$2,039.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a GD collar?

The breakeven for the GD collar priced on this page is roughly $395.39 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The GD market-implied 1-standard-deviation expected move in the same options snapshot is approximately 5.00%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current GD implied volatility affect this collar?

GD ATM IV is at 17.43% with IV rank near 21.66%, 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.

GD Collar Strategy

GD (General Dynamics Corporation), in the Industrials sector, (Aerospace & Defense industry), listed on NYSE.

General Dynamics Corporation is a global leader in the aerospace and defense industry, with its operations structured across four key divisions: Aerospace, Marine Systems, Combat Systems, and Technologies. The Aerospace segment focuses on the design, production, and sale of business jets, alongside offering a full suite of aviation services including aircraft maintenance, repair, management, charter services, and ground support. Marine Systems specializes in shipbuilding for the U.S. Navy, constructing nuclear-powered submarines, surface warships, and auxiliary vessels. This division also builds various commercial ships, such as tankers and cargo carriers. Furthermore, it provides extensive maintenance, modernization, and lifecycle support, along with engineering and design services for both naval and commercial fleets.

GD (General Dynamics Corporation) trades in the Industrials sector, specifically Aerospace & Defense, with a market capitalization of approximately $106.66B, a trailing P/E of 23.74, a beta of 0.33 versus the broader market, a 52-week range of 306.77-400, average daily share volume of 1.3M, a public-listing history dating back to 1978, approximately 117K full-time employees. These structural characteristics shape how GD stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.33 indicates GD has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. GD pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a collar on GD?

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.

GD snapshot

As of August 14, 2026, spot at $395.39, ATM IV 17.43%, IV rank 21.66%, expected move 5.00%. The collar on GD below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 28-day expiry.

Why this collar structure on GD specifically: IV regime affects collar pricing on both sides; compressed GD IV at 17.43% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 5.00% (roughly $19.76 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated GD expiries trade a higher absolute premium for lower per-day decay. Position sizing on GD should anchor to the underlying notional of $395.39 per share and to the trader's directional view on GD stock.

GD collar setup

The GD collar below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With GD at $395.39 on that close, the first option leg uses a $415.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed GD chain at a 28-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 GD shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$395.39	long
Sell 1	Call	$415.00	$1.90
Buy 1	Put	$375.00	$1.90

GD collar risk and reward

Net Premium / Debit: -$39,539.00
Max Profit (per contract): $1,961.00
Max Loss (per contract): -$2,039.00
Breakeven(s): $395.39
Risk / Reward Ratio: 0.962

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.

GD collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on GD. 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.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$2,039.00
$87.43	-77.9%	-$2,039.00
$174.85	-55.8%	-$2,039.00
$262.28	-33.7%	-$2,039.00
$349.70	-11.6%	-$2,039.00
$437.12	+10.6%	+$1,961.00
$524.54	+32.7%	+$1,961.00
$611.96	+54.8%	+$1,961.00
$699.38	+76.9%	+$1,961.00
$786.81	+99.0%	+$1,961.00

When traders use collar on GD

Collars on GD hedge an existing long GD 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.

GD thesis for this collar

The market-implied 1-standard-deviation range for GD extends from approximately $375.63 on the downside to $415.15 on the upside. A GD collar hedges an existing long GD 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 GD IV rank near 21.66% 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 GD at 17.43%. As a Industrials name, GD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to GD-specific events.

GD 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. GD positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move GD alongside the broader basket even when GD-specific fundamentals are unchanged. Always rebuild the position from current GD chain quotes before placing a trade.

Frequently asked questions

What is a collar on GD?: A collar on GD is the collar strategy applied to GD (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 GD stock at $395.39 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed GD chain strike and the premiums come straight from that session's bid/ask midpoint.
How are GD 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 GD collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 17.43%), the computed maximum profit is $1,961.00 per contract and the computed maximum loss is -$2,039.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a GD collar?: The breakeven for the GD collar priced on this page is roughly $395.39 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The GD market-implied 1-standard-deviation expected move in the same options snapshot is approximately 5.00%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on GD?: Collars on GD hedge an existing long GD 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 GD implied volatility affect this collar?: GD ATM IV is at 17.43% with IV rank near 21.66%, 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.