How are IPI 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 IPI collar priced from the end-of-day chain at a 30-day expiry (ATM IV 40.60%), the computed maximum profit is $182.50 per contract and the computed maximum loss is -$117.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a IPI collar?

The breakeven for the IPI collar priced on this page is roughly $32.18 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 IPI market-implied 1-standard-deviation expected move is approximately 11.64%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current IPI implied volatility affect this collar?

IPI ATM IV is at 40.60% with IV rank near 16.59%, 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.

IPI Collar Strategy

IPI (Intrepid Potash, Inc.), in the Basic Materials sector, (Agricultural Inputs industry), listed on NYSE.

Intrepid Potash, Inc. (IPI), a company founded in 2000 and based in Denver, Colorado, specializes in the extraction and production of potash for markets within the United States and globally. The firm's operations are strategically divided into three principal segments: Potash, Trio, and Oilfield Solutions. Within the Potash segment, Intrepid supplies muriate of potash, also known as potassium chloride. This versatile compound serves multiple applications, including as a vital fertilizer component for agriculture, an essential ingredient in drilling and fracturing fluids for the oil and gas sector, an input for various industrial processes, and a nutritional supplement for animal feed. The Trio segment focuses on a specialized fertilizer product named Trio, which uniquely delivers potassium, sulfate, and magnesium in a single, convenient particle. Through its Oilfield Solutions segment, Intrepid provides critical support to the oil and gas services industry by supplying water, delivering on-site, real-time potassium chloride mixing for hydraulic fracturing operations, and offering comprehensive trucking services.

IPI (Intrepid Potash, Inc.) trades in the Basic Materials sector, specifically Agricultural Inputs, with a market capitalization of approximately $464.6M, a trailing P/E of 32.47, a beta of 1.22 versus the broader market, a 52-week range of 22.55-50.34, average daily share volume of 258K, a public-listing history dating back to 2008, approximately 468 full-time employees. These structural characteristics shape how IPI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.22 places IPI roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.

What is a collar on IPI?

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 IPI snapshot

As of June 30, 2026, spot at $32.81, ATM IV 40.60%, IV rank 16.59%, expected move 11.64%. The collar on IPI 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 IPI specifically: IV regime affects collar pricing on both sides; compressed IPI IV at 40.60% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 11.64% (roughly $3.82 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 IPI expiries trade a higher absolute premium for lower per-day decay. Position sizing on IPI should anchor to the underlying notional of $32.81 per share and to the trader's directional view on IPI stock.

IPI collar setup

The IPI 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 IPI near $32.81, the first option leg uses a $34.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed IPI 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 IPI shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$32.81	long
Sell 1	Call	$34.00	$0.93
Buy 1	Put	$31.00	$0.29

IPI collar risk and reward

Net Premium / Debit: -$3,217.50
Max Profit (per contract): $182.50
Max Loss (per contract): -$117.50
Breakeven(s): $32.18
Risk / Reward Ratio: 1.553

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.

IPI collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on IPI. 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%	-$117.50
$7.26	-77.9%	-$117.50
$14.52	-55.8%	-$117.50
$21.77	-33.6%	-$117.50
$29.02	-11.5%	-$117.50
$36.28	+10.6%	+$182.50
$43.53	+32.7%	+$182.50
$50.78	+54.8%	+$182.50
$58.04	+76.9%	+$182.50
$65.29	+99.0%	+$182.50

When traders use collar on IPI

Collars on IPI hedge an existing long IPI 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.

IPI thesis for this collar

The market-implied 1-standard-deviation range for IPI extends from approximately $28.99 on the downside to $36.63 on the upside. A IPI collar hedges an existing long IPI 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 IPI IV rank near 16.59% 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 IPI at 40.60%. As a Basic Materials name, IPI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to IPI-specific events.

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

Frequently asked questions

What is a collar on IPI?: A collar on IPI is the collar strategy applied to IPI (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 IPI stock trading near $32.81, the strikes shown on this page are snapped to the nearest listed IPI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are IPI 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 IPI collar priced from the end-of-day chain at a 30-day expiry (ATM IV 40.60%), the computed maximum profit is $182.50 per contract and the computed maximum loss is -$117.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a IPI collar?: The breakeven for the IPI collar priced on this page is roughly $32.18 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 IPI market-implied 1-standard-deviation expected move is approximately 11.64%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on IPI?: Collars on IPI hedge an existing long IPI 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 IPI implied volatility affect this collar?: IPI ATM IV is at 40.60% with IV rank near 16.59%, 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.