KNF Collar Strategy
KNF (Knife River Corporation), in the Basic Materials sector, (Construction Materials industry), listed on NYSE.
Knife River Corporation provides aggregates-based construction materials and contracting services in the United States. It operates through six segments: Pacific, Northwest, Mountain, North Central, South, and Energy Services. The company mines, processes, and sells construction aggregates, including crushed stone and sand, and gravel; and produces and sells asphalt and ready-mix concrete, as well as provides contracting services to support the aggregate-based product lines, including heavy-civil construction, asphalt and concrete paving, and site development and grading. It serves federal, state, and municipal governments for various projects, such as highways, bridges, airports, schools, public buildings, and other public-infrastructure projects. The company was founded in 1917 and is based in Bismarck, North Dakota.
KNF (Knife River Corporation) trades in the Basic Materials sector, specifically Construction Materials, with a market capitalization of approximately $4.52B, a trailing P/E of 30.81, a beta of 0.67 versus the broader market, a 52-week range of 58.72-101.1, average daily share volume of 616K, a public-listing history dating back to 2023, approximately 5K full-time employees. These structural characteristics shape how KNF stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.67 indicates KNF has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure.
What is a collar on KNF?
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 KNF snapshot
As of May 15, 2026, spot at $75.66, ATM IV 45.30%, IV rank 36.11%, expected move 12.99%. The collar on KNF 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 98-day expiry.
Why this collar structure on KNF specifically: IV regime affects collar pricing on both sides; mid-range KNF IV at 45.30% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 12.99% (roughly $9.83 on the underlying). The 98-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated KNF expiries trade a higher absolute premium for lower per-day decay. Position sizing on KNF should anchor to the underlying notional of $75.66 per share and to the trader's directional view on KNF stock.
KNF collar setup
The KNF 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 KNF near $75.66, the first option leg uses a $80.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed KNF chain at a 98-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 KNF shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $75.66 | long |
| Sell 1 | Call | $80.00 | $6.60 |
| Buy 1 | Put | $70.00 | $3.93 |
KNF collar risk and reward
- Net Premium / Debit
- -$7,298.50
- Max Profit (per contract)
- $701.50
- Max Loss (per contract)
- -$298.50
- Breakeven(s)
- $72.99
- Risk / Reward Ratio
- 2.350
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.
KNF collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on KNF. 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% | -$298.50 |
| $16.74 | -77.9% | -$298.50 |
| $33.47 | -55.8% | -$298.50 |
| $50.19 | -33.7% | -$298.50 |
| $66.92 | -11.6% | -$298.50 |
| $83.65 | +10.6% | +$701.50 |
| $100.38 | +32.7% | +$701.50 |
| $117.10 | +54.8% | +$701.50 |
| $133.83 | +76.9% | +$701.50 |
| $150.56 | +99.0% | +$701.50 |
When traders use collar on KNF
Collars on KNF hedge an existing long KNF 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.
KNF thesis for this collar
The market-implied 1-standard-deviation range for KNF extends from approximately $65.83 on the downside to $85.49 on the upside. A KNF collar hedges an existing long KNF 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 KNF IV rank near 36.11% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on KNF should anchor more to the directional view and the expected-move geometry. As a Basic Materials name, KNF options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to KNF-specific events.
KNF 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. KNF positions also carry Basic Materials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move KNF alongside the broader basket even when KNF-specific fundamentals are unchanged. Always rebuild the position from current KNF chain quotes before placing a trade.
Frequently asked questions
- What is a collar on KNF?
- A collar on KNF is the collar strategy applied to KNF (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 KNF stock trading near $75.66, the strikes shown on this page are snapped to the nearest listed KNF chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are KNF 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 KNF collar priced from the end-of-day chain at a 30-day expiry (ATM IV 45.30%), the computed maximum profit is $701.50 per contract and the computed maximum loss is -$298.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a KNF collar?
- The breakeven for the KNF collar priced on this page is roughly $72.99 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 KNF market-implied 1-standard-deviation expected move is approximately 12.99%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on KNF?
- Collars on KNF hedge an existing long KNF 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 KNF implied volatility affect this collar?
- KNF ATM IV is at 45.30% with IV rank near 36.11%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.