HEI Collar Strategy
HEI (HEICO Corporation), in the Industrials sector, (Aerospace & Defense industry), listed on NYSE.
HEICO Corporation, through its subsidiaries, designs, manufactures, and sells aerospace, defense, and electronic related products and services in the United States and internationally. The company's Flight Support Group segment provides jet engine and aircraft component replacement parts; thermal insulation blankets and parts; renewable/reusable insulation systems; and specialty components. This segment also distributes hydraulic, pneumatic, structural, interconnect, mechanical, and electro-mechanical components for the commercial, regional, and general aviation markets; and offers repair and overhaul services for jet engine and aircraft component parts, avionics, instruments, composites, and flight surfaces of commercial aircraft, as well as for avionics and navigation systems, subcomponents, and other instruments utilized on military aircraft. Its Electronic Technologies Group segment provides electro-optical infrared simulation and test equipment; electro-optical laser products; electro-optical, microwave, and other power equipment; electromagnetic and RFI shielding and suppression filters; high-speed interface products; high voltage interconnection devices; high voltage advanced power electronics; power conversion products; and underwater locator beacons and emergency locator transmission beacons. This segment also offers traveling wave tube amplifiers and microwave power modules; three-dimensional microelectronic and stacked memory products; harsh environment connectivity products and custom molded cable assemblies; radio frequency and microwave amplifiers, transmitters, and receivers; communications and electronic intercept receivers and tuners; self-sealing auxiliary fuel systems; active antenna systems; and nuclear radiation detectors. The company serves customers primarily in the aviation, defense, space, medical, telecommunications, and electronics industries.
HEI (HEICO Corporation) trades in the Industrials sector, specifically Aerospace & Defense, with a market capitalization of approximately $40.61B, a trailing P/E of 57.07, a beta of 0.95 versus the broader market, a 52-week range of 256.11-361.69, average daily share volume of 727K, a public-listing history dating back to 1980, approximately 10K full-time employees. These structural characteristics shape how HEI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.95 places HEI roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 57.07 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. HEI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on HEI?
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 HEI snapshot
As of May 15, 2026, spot at $288.65, ATM IV 42.40%, IV rank 82.74%, expected move 12.16%. The collar on HEI 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 HEI specifically: IV regime affects collar pricing on both sides; elevated HEI IV at 42.40% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 12.16% (roughly $35.09 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 HEI expiries trade a higher absolute premium for lower per-day decay. Position sizing on HEI should anchor to the underlying notional of $288.65 per share and to the trader's directional view on HEI stock.
HEI collar setup
The HEI 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 HEI near $288.65, the first option leg uses a $300.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed HEI 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 HEI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $288.65 | long |
| Sell 1 | Call | $300.00 | $10.65 |
| Buy 1 | Put | $270.00 | $7.10 |
HEI collar risk and reward
- Net Premium / Debit
- -$28,510.00
- Max Profit (per contract)
- $1,490.00
- Max Loss (per contract)
- -$1,510.00
- Breakeven(s)
- $285.10
- Risk / Reward Ratio
- 0.987
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.
HEI collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on HEI. 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% | -$1,510.00 |
| $63.83 | -77.9% | -$1,510.00 |
| $127.65 | -55.8% | -$1,510.00 |
| $191.47 | -33.7% | -$1,510.00 |
| $255.29 | -11.6% | -$1,510.00 |
| $319.12 | +10.6% | +$1,490.00 |
| $382.94 | +32.7% | +$1,490.00 |
| $446.76 | +54.8% | +$1,490.00 |
| $510.58 | +76.9% | +$1,490.00 |
| $574.40 | +99.0% | +$1,490.00 |
When traders use collar on HEI
Collars on HEI hedge an existing long HEI 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.
HEI thesis for this collar
The market-implied 1-standard-deviation range for HEI extends from approximately $253.56 on the downside to $323.74 on the upside. A HEI collar hedges an existing long HEI 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 HEI IV rank near 82.74% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on HEI at 42.40%. As a Industrials name, HEI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to HEI-specific events.
HEI 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. HEI positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move HEI alongside the broader basket even when HEI-specific fundamentals are unchanged. Always rebuild the position from current HEI chain quotes before placing a trade.
Frequently asked questions
- What is a collar on HEI?
- A collar on HEI is the collar strategy applied to HEI (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 HEI stock trading near $288.65, the strikes shown on this page are snapped to the nearest listed HEI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are HEI 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 HEI collar priced from the end-of-day chain at a 30-day expiry (ATM IV 42.40%), the computed maximum profit is $1,490.00 per contract and the computed maximum loss is -$1,510.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a HEI collar?
- The breakeven for the HEI collar priced on this page is roughly $285.10 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 HEI market-implied 1-standard-deviation expected move is approximately 12.16%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on HEI?
- Collars on HEI hedge an existing long HEI 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 HEI implied volatility affect this collar?
- HEI ATM IV is at 42.40% with IV rank near 82.74%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.