GRC Collar Strategy
GRC (The Gorman-Rupp Company), in the Industrials sector, (Industrial - Machinery industry), listed on NYSE.
The Gorman-Rupp Company specializes in the design, production, and distribution of a broad spectrum of pumps and associated systems, serving markets both within the United States and globally. Their comprehensive portfolio encompasses a wide array of pump types, such as self-priming, standard, and magnetic drive centrifugal units; axial and mixed flow designs; vertical turbine line shaft, submersible, and high-pressure booster pumps; alongside rotary gear, diaphragm, bellows, and oscillating models. These versatile solutions are essential across numerous sectors, including municipal water and wastewater management, building and infrastructure projects, dewatering operations, diverse industrial processes, the petroleum industry, original equipment manufacturing (OEM), agricultural irrigation, fire suppression systems, military applications, and general fluid transfer, including heating, ventilating, and air conditioning (HVAC). To reach its diverse clientele, the company employs a multi-channel sales strategy, leveraging an established network of distributors and independent manufacturers' representatives, sales via third-party catalogs, direct engagement with customers, and e-commerce platforms. Established in 1933, The Gorman-Rupp Company maintains its corporate headquarters in Mansfield, Ohio.
GRC (The Gorman-Rupp Company) trades in the Industrials sector, specifically Industrial - Machinery, with a market capitalization of approximately $2.36B, a trailing P/E of 40.03, a beta of 1.32 versus the broader market, a 52-week range of 36.41-91.38, average daily share volume of 171K, a public-listing history dating back to 1980, approximately 1K full-time employees. These structural characteristics shape how GRC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.32 indicates GRC has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. The trailing P/E of 40.03 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. GRC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on GRC?
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 GRC snapshot
As of June 30, 2026, spot at $91.53, ATM IV 46.20%, IV rank 20.93%, expected move 13.25%. The collar on GRC 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 171-day expiry.
Why this collar structure on GRC specifically: IV regime affects collar pricing on both sides; compressed GRC IV at 46.20% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 13.25% (roughly $12.12 on the underlying). The 171-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated GRC expiries trade a higher absolute premium for lower per-day decay. Position sizing on GRC should anchor to the underlying notional of $91.53 per share and to the trader's directional view on GRC stock.
GRC collar setup
The GRC 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 GRC near $91.53, the first option leg uses a $95.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed GRC chain at a 171-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 GRC shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $91.53 | long |
| Sell 1 | Call | $95.00 | $9.00 |
| Buy 1 | Put | $85.00 | $5.65 |
GRC collar risk and reward
- Net Premium / Debit
- -$8,818.00
- Max Profit (per contract)
- $682.00
- Max Loss (per contract)
- -$318.00
- Breakeven(s)
- $88.18
- Risk / Reward Ratio
- 2.145
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.
GRC collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on GRC. 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% | -$318.00 |
| $20.25 | -77.9% | -$318.00 |
| $40.48 | -55.8% | -$318.00 |
| $60.72 | -33.7% | -$318.00 |
| $80.96 | -11.6% | -$318.00 |
| $101.19 | +10.6% | +$682.00 |
| $121.43 | +32.7% | +$682.00 |
| $141.67 | +54.8% | +$682.00 |
| $161.90 | +76.9% | +$682.00 |
| $182.14 | +99.0% | +$682.00 |
When traders use collar on GRC
Collars on GRC hedge an existing long GRC 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.
GRC thesis for this collar
The market-implied 1-standard-deviation range for GRC extends from approximately $79.41 on the downside to $103.65 on the upside. A GRC collar hedges an existing long GRC 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 GRC IV rank near 20.93% 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 GRC at 46.20%. As a Industrials name, GRC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to GRC-specific events.
GRC 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. GRC positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move GRC alongside the broader basket even when GRC-specific fundamentals are unchanged. Always rebuild the position from current GRC chain quotes before placing a trade.
Frequently asked questions
- What is a collar on GRC?
- A collar on GRC is the collar strategy applied to GRC (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 GRC stock trading near $91.53, the strikes shown on this page are snapped to the nearest listed GRC chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are GRC 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 GRC collar priced from the end-of-day chain at a 30-day expiry (ATM IV 46.20%), the computed maximum profit is $682.00 per contract and the computed maximum loss is -$318.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a GRC collar?
- The breakeven for the GRC collar priced on this page is roughly $88.18 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 GRC market-implied 1-standard-deviation expected move is approximately 13.25%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on GRC?
- Collars on GRC hedge an existing long GRC 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 GRC implied volatility affect this collar?
- GRC ATM IV is at 46.20% with IV rank near 20.93%, 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.