LH Collar Strategy
LH (Labcorp Holdings Inc.), in the Healthcare sector, (Medical - Diagnostics & Research industry), listed on NYSE.
Labcorp Holdings, Inc. provides laboratory services to help doctors, hospitals, pharmaceutical companies, researchers and patients make clear and confident decisions. The company was founded on April 16, 2024 and is headquartered in Burlington, NC.
LH (Labcorp Holdings Inc.) trades in the Healthcare sector, specifically Medical - Diagnostics & Research, with a market capitalization of approximately $20.86B, a trailing P/E of 22.24, a beta of 0.88 versus the broader market, a 52-week range of 239.67-293.72, average daily share volume of 661K, a public-listing history dating back to 1990, approximately 61K full-time employees. These structural characteristics shape how LH stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.88 places LH roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. LH pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on LH?
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 LH snapshot
As of May 15, 2026, spot at $251.74, ATM IV 25.00%, IV rank 38.07%, expected move 7.17%. The collar on LH 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 LH specifically: IV regime affects collar pricing on both sides; mid-range LH IV at 25.00% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 7.17% (roughly $18.04 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 LH expiries trade a higher absolute premium for lower per-day decay. Position sizing on LH should anchor to the underlying notional of $251.74 per share and to the trader's directional view on LH stock.
LH collar setup
The LH 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 LH near $251.74, the first option leg uses a $260.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed LH 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 LH shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $251.74 | long |
| Sell 1 | Call | $260.00 | $4.20 |
| Buy 1 | Put | $240.00 | $3.25 |
LH collar risk and reward
- Net Premium / Debit
- -$25,079.00
- Max Profit (per contract)
- $921.00
- Max Loss (per contract)
- -$1,079.00
- Breakeven(s)
- $250.79
- Risk / Reward Ratio
- 0.854
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.
LH collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on LH. 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% | -$1,079.00 |
| $55.67 | -77.9% | -$1,079.00 |
| $111.33 | -55.8% | -$1,079.00 |
| $166.99 | -33.7% | -$1,079.00 |
| $222.65 | -11.6% | -$1,079.00 |
| $278.31 | +10.6% | +$921.00 |
| $333.97 | +32.7% | +$921.00 |
| $389.63 | +54.8% | +$921.00 |
| $445.29 | +76.9% | +$921.00 |
| $500.95 | +99.0% | +$921.00 |
When traders use collar on LH
Collars on LH hedge an existing long LH 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.
LH thesis for this collar
The market-implied 1-standard-deviation range for LH extends from approximately $233.70 on the downside to $269.78 on the upside. A LH collar hedges an existing long LH 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 LH IV rank near 38.07% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on LH should anchor more to the directional view and the expected-move geometry. As a Healthcare name, LH options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to LH-specific events.
LH 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. LH positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move LH alongside the broader basket even when LH-specific fundamentals are unchanged. Always rebuild the position from current LH chain quotes before placing a trade.
Frequently asked questions
- What is a collar on LH?
- A collar on LH is the collar strategy applied to LH (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 LH stock trading near $251.74, the strikes shown on this page are snapped to the nearest listed LH chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are LH 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 LH collar priced from the end-of-day chain at a 30-day expiry (ATM IV 25.00%), the computed maximum profit is $921.00 per contract and the computed maximum loss is -$1,079.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a LH collar?
- The breakeven for the LH collar priced on this page is roughly $250.79 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 LH market-implied 1-standard-deviation expected move is approximately 7.17%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on LH?
- Collars on LH hedge an existing long LH 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 LH implied volatility affect this collar?
- LH ATM IV is at 25.00% with IV rank near 38.07%, 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.