INSM Collar Strategy
INSM (Insmed Incorporated), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Insmed Incorporated, a biopharmaceutical company, develops and commercializes therapies for patients with serious and rare diseases. The company offers ARIKAYCE for the treatment of Mycobacterium avium complex lung disease as part of a combination antibacterial drug regimen for adult patients. It is also developing Brensocatib, an oral reversible inhibitor of dipeptidyl peptidase 1 for the treatment of patients with bronchiectasis and other neutrophil-mediated diseases; and Treprostinil Palmitil Inhalation Powder, an inhaled formulation of a treprostinil prodrug treprostinil palmitil for the treatment of pulmonary arterial hypertension and other rare pulmonary disorders. Insmed Incorporated was founded in 1988 and is headquartered in Bridgewater, New Jersey.
INSM (Insmed Incorporated) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $25.57B, a beta of 0.89 versus the broader market, a 52-week range of 64.85-212.75, average daily share volume of 2.6M, a public-listing history dating back to 2000, approximately 1K full-time employees. These structural characteristics shape how INSM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.89 places INSM roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a collar on INSM?
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 INSM snapshot
As of May 15, 2026, spot at $109.73, ATM IV 48.90%, IV rank 27.06%, expected move 14.02%. The collar on INSM 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 INSM specifically: IV regime affects collar pricing on both sides; compressed INSM IV at 48.90% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 14.02% (roughly $15.38 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 INSM expiries trade a higher absolute premium for lower per-day decay. Position sizing on INSM should anchor to the underlying notional of $109.73 per share and to the trader's directional view on INSM stock.
INSM collar setup
The INSM 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 INSM near $109.73, the first option leg uses a $115.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed INSM 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 INSM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $109.73 | long |
| Sell 1 | Call | $115.00 | $4.55 |
| Buy 1 | Put | $105.00 | $4.20 |
INSM collar risk and reward
- Net Premium / Debit
- -$10,938.00
- Max Profit (per contract)
- $562.00
- Max Loss (per contract)
- -$438.00
- Breakeven(s)
- $109.38
- Risk / Reward Ratio
- 1.283
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.
INSM collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on INSM. 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% | -$438.00 |
| $24.27 | -77.9% | -$438.00 |
| $48.53 | -55.8% | -$438.00 |
| $72.79 | -33.7% | -$438.00 |
| $97.05 | -11.6% | -$438.00 |
| $121.31 | +10.6% | +$562.00 |
| $145.57 | +32.7% | +$562.00 |
| $169.84 | +54.8% | +$562.00 |
| $194.10 | +76.9% | +$562.00 |
| $218.36 | +99.0% | +$562.00 |
When traders use collar on INSM
Collars on INSM hedge an existing long INSM 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.
INSM thesis for this collar
The market-implied 1-standard-deviation range for INSM extends from approximately $94.35 on the downside to $125.11 on the upside. A INSM collar hedges an existing long INSM 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 INSM IV rank near 27.06% 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 INSM at 48.90%. As a Healthcare name, INSM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to INSM-specific events.
INSM 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. INSM positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move INSM alongside the broader basket even when INSM-specific fundamentals are unchanged. Always rebuild the position from current INSM chain quotes before placing a trade.
Frequently asked questions
- What is a collar on INSM?
- A collar on INSM is the collar strategy applied to INSM (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 INSM stock trading near $109.73, the strikes shown on this page are snapped to the nearest listed INSM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are INSM 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 INSM collar priced from the end-of-day chain at a 30-day expiry (ATM IV 48.90%), the computed maximum profit is $562.00 per contract and the computed maximum loss is -$438.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a INSM collar?
- The breakeven for the INSM collar priced on this page is roughly $109.38 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 INSM market-implied 1-standard-deviation expected move is approximately 14.02%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on INSM?
- Collars on INSM hedge an existing long INSM 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 INSM implied volatility affect this collar?
- INSM ATM IV is at 48.90% with IV rank near 27.06%, 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.