KIDS Collar Strategy
KIDS (OrthoPediatrics Corp.), in the Healthcare sector, (Medical - Devices industry), listed on NASDAQ.
OrthoPediatrics Corp., a medical device company, designs, develops, and markets anatomically appropriate implants and devices for the treatment of children with orthopedic conditions in the United States and internationally. The company offers trauma and deformity correction products; scoliosis procedures for the treatment of spinal deformity; and sports medicine and other products. Its products comprise PediLoc, PediPlates, cannulated screws, PediFlex nail, PediNail, PediLoc tibia, anterior cruciate ligament reconstruction systems, locking cannulated blades, locking proximal femurs, Spica Tables, RESPONSE Spine systems, Bandloc, Pediguard, Pediatric Nailing Platform, Femur system, Orthex, QuickPack, and ApiFix Mid-C system. The company serves pediatric orthopedic market, as well as pediatric orthopedic surgeons and caregivers. OrthoPediatrics Corp. was founded in 2006 and is headquartered in Warsaw, Indiana.
KIDS (OrthoPediatrics Corp.) trades in the Healthcare sector, specifically Medical - Devices, with a market capitalization of approximately $456.9M, a beta of 0.99 versus the broader market, a 52-week range of 14.42-23.7, average daily share volume of 172K, a public-listing history dating back to 2017, approximately 562 full-time employees. These structural characteristics shape how KIDS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.99 places KIDS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a collar on KIDS?
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 KIDS snapshot
As of May 15, 2026, spot at $17.80, ATM IV 26.10%, IV rank 1.70%, expected move 7.48%. The collar on KIDS 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 KIDS specifically: IV regime affects collar pricing on both sides; compressed KIDS IV at 26.10% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 7.48% (roughly $1.33 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 KIDS expiries trade a higher absolute premium for lower per-day decay. Position sizing on KIDS should anchor to the underlying notional of $17.80 per share and to the trader's directional view on KIDS stock.
KIDS collar setup
The KIDS 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 KIDS near $17.80, the first option leg uses a $18.69 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed KIDS 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 KIDS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $17.80 | long |
| Sell 1 | Call | $18.69 | N/A |
| Buy 1 | Put | $16.91 | N/A |
KIDS collar risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
KIDS collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on KIDS. 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.
When traders use collar on KIDS
Collars on KIDS hedge an existing long KIDS 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.
KIDS thesis for this collar
The market-implied 1-standard-deviation range for KIDS extends from approximately $16.47 on the downside to $19.13 on the upside. A KIDS collar hedges an existing long KIDS 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 KIDS IV rank near 1.70% 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 KIDS at 26.10%. As a Healthcare name, KIDS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to KIDS-specific events.
KIDS 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. KIDS positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move KIDS alongside the broader basket even when KIDS-specific fundamentals are unchanged. Always rebuild the position from current KIDS chain quotes before placing a trade.
Frequently asked questions
- What is a collar on KIDS?
- A collar on KIDS is the collar strategy applied to KIDS (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 KIDS stock trading near $17.80, the strikes shown on this page are snapped to the nearest listed KIDS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are KIDS 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 KIDS collar priced from the end-of-day chain at a 30-day expiry (ATM IV 26.10%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a KIDS collar?
- The breakeven for the KIDS collar priced on this page is no defined breakeven on the modeled curve 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 KIDS market-implied 1-standard-deviation expected move is approximately 7.48%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on KIDS?
- Collars on KIDS hedge an existing long KIDS 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 KIDS implied volatility affect this collar?
- KIDS ATM IV is at 26.10% with IV rank near 1.70%, 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.