How are KD 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 KD collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 50.10%), the computed maximum profit is $64.00 per contract and the computed maximum loss is -$36.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a KD collar?

The breakeven for the KD collar priced on this page is roughly $13.36 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 KD market-implied 1-standard-deviation expected move in the same options snapshot is approximately 14.36%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current KD implied volatility affect this collar?

KD ATM IV is at 50.10% with IV rank near 9.52%, 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.

KD Collar Strategy

KD (Kyndryl Holdings, Inc.), in the Technology sector, (Information Technology Services industry), listed on NYSE.

Kyndryl Holdings, Inc. functions as a global technology and IT infrastructure services specialist. The firm delivers a comprehensive portfolio of IT solutions, encompassing cloud computing, foundational enterprise platforms, application development, data analytics, and artificial intelligence capabilities. Additionally, Kyndryl provides services related to modern digital workplaces, robust security and resiliency, alongside advanced network and edge computing solutions. It caters to a diverse clientele across various sectors such as finance, telecommunications, retail, automotive, and logistics. Established in 2020, its corporate headquarters are situated in New York, New York.

KD (Kyndryl Holdings, Inc.) trades in the Technology sector, specifically Information Technology Services, with a market capitalization of approximately $2.88B, a trailing P/E of 8.78, a beta of 1.72 versus the broader market, a 52-week range of 10.1-33.9, average daily share volume of 4.3M, a public-listing history dating back to 2021, approximately 72K full-time employees. These structural characteristics shape how KD stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.72 indicates KD 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 8.78 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price.

What is a collar on KD?

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.

KD snapshot

As of August 14, 2026, spot at $13.21, ATM IV 50.10%, IV rank 9.52%, expected move 14.36%. The collar on KD 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 35-day expiry.

Why this collar structure on KD specifically: IV regime affects collar pricing on both sides; compressed KD IV at 50.10% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 14.36% (roughly $1.90 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated KD expiries trade a higher absolute premium for lower per-day decay. Position sizing on KD should anchor to the underlying notional of $13.21 per share and to the trader's directional view on KD stock.

KD collar setup

The KD 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 KD at $13.21 on that close, the first option leg uses a $14.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed KD chain at a 35-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 KD shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$13.21	long
Sell 1	Call	$14.00	$0.50
Buy 1	Put	$13.00	$0.65

KD collar risk and reward

Net Premium / Debit: -$1,336.00
Max Profit (per contract): $64.00
Max Loss (per contract): -$36.00
Breakeven(s): $13.36
Risk / Reward Ratio: 1.778

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.

KD collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on KD. 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	-99.9%	-$36.00
$2.93	-77.8%	-$36.00
$5.85	-55.7%	-$36.00
$8.77	-33.6%	-$36.00
$11.69	-11.5%	-$36.00
$14.61	+10.6%	+$64.00
$17.53	+32.7%	+$64.00
$20.45	+54.8%	+$64.00
$23.37	+76.9%	+$64.00
$26.29	+99.0%	+$64.00

When traders use collar on KD

Collars on KD hedge an existing long KD 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.

KD thesis for this collar

The market-implied 1-standard-deviation range for KD extends from approximately $11.31 on the downside to $15.11 on the upside. A KD collar hedges an existing long KD 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 KD IV rank near 9.52% 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 KD at 50.10%. As a Technology name, KD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to KD-specific events.

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

Frequently asked questions

What is a collar on KD?: A collar on KD is the collar strategy applied to KD (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 KD stock at $13.21 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed KD chain strike and the premiums come straight from that session's bid/ask midpoint.
How are KD 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 KD collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 50.10%), the computed maximum profit is $64.00 per contract and the computed maximum loss is -$36.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a KD collar?: The breakeven for the KD collar priced on this page is roughly $13.36 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 KD market-implied 1-standard-deviation expected move in the same options snapshot is approximately 14.36%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on KD?: Collars on KD hedge an existing long KD 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 KD implied volatility affect this collar?: KD ATM IV is at 50.10% with IV rank near 9.52%, 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.