LHX Collar Strategy
LHX (L3Harris Technologies, Inc.), in the Industrials sector, (Aerospace & Defense industry), listed on NYSE.
L3Harris Technologies, Inc., an aerospace and defense technology company, provides mission-critical solutions for government and commercial customers worldwide. The company's Integrated Mission Systems segment provides multi-mission intelligence, surveillance, and reconnaissance (ISR) systems; and communication systems, as well as fleet management support, sensor development, modification, and periodic depot maintenance services for ISR and airborne missions. It also manufactures and integrates mission systems for maritime platforms, such as signals intelligence and multi-intelligence platforms; unmanned surface and undersea autonomous solutions; and power and ship control systems and other electronic and electrical products and systems. In addition, this segment offers advanced electro-optical and infrared solutions. Its Space and Airborne Systems segment offers space payloads, sensors, and full-mission solutions; classified intelligence and cyber defense solutions; mission avionics; and electronic warfare systems. The company's Communication Systems segment provides tactical communications; broadband secured mobile networked communication equipment, including airborne, space, and surface data link terminals, ground stations, and transportable tactical satellite communication (SATCOM) systems for use in manned aircraft, unmanned aerial vehicles, and naval ships; and helmet and weapon mounted integrated night vision systems.
LHX (L3Harris Technologies, Inc.) trades in the Industrials sector, specifically Aerospace & Defense, with a market capitalization of approximately $56.81B, a trailing P/E of 32.90, a beta of 0.75 versus the broader market, a 52-week range of 220.87-379.23, average daily share volume of 1.7M, a public-listing history dating back to 1981, approximately 47K full-time employees. These structural characteristics shape how LHX stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.75 places LHX roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. LHX pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on LHX?
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 LHX snapshot
As of May 15, 2026, spot at $303.83, ATM IV 28.92%, IV rank 55.00%, expected move 8.29%. The collar on LHX 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 28-day expiry.
Why this collar structure on LHX specifically: IV regime affects collar pricing on both sides; mid-range LHX IV at 28.92% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 8.29% (roughly $25.19 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated LHX expiries trade a higher absolute premium for lower per-day decay. Position sizing on LHX should anchor to the underlying notional of $303.83 per share and to the trader's directional view on LHX stock.
LHX collar setup
The LHX 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 LHX near $303.83, the first option leg uses a $320.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed LHX chain at a 28-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 LHX shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $303.83 | long |
| Sell 1 | Call | $320.00 | $3.70 |
| Buy 1 | Put | $290.00 | $4.50 |
LHX collar risk and reward
- Net Premium / Debit
- -$30,463.00
- Max Profit (per contract)
- $1,537.00
- Max Loss (per contract)
- -$1,463.00
- Breakeven(s)
- $304.63
- Risk / Reward Ratio
- 1.051
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.
LHX collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on LHX. 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% | -$1,463.00 |
| $67.19 | -77.9% | -$1,463.00 |
| $134.36 | -55.8% | -$1,463.00 |
| $201.54 | -33.7% | -$1,463.00 |
| $268.72 | -11.6% | -$1,463.00 |
| $335.90 | +10.6% | +$1,537.00 |
| $403.07 | +32.7% | +$1,537.00 |
| $470.25 | +54.8% | +$1,537.00 |
| $537.43 | +76.9% | +$1,537.00 |
| $604.61 | +99.0% | +$1,537.00 |
When traders use collar on LHX
Collars on LHX hedge an existing long LHX 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.
LHX thesis for this collar
The market-implied 1-standard-deviation range for LHX extends from approximately $278.64 on the downside to $329.02 on the upside. A LHX collar hedges an existing long LHX 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 LHX IV rank near 55.00% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on LHX should anchor more to the directional view and the expected-move geometry. As a Industrials name, LHX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to LHX-specific events.
LHX 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. LHX positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move LHX alongside the broader basket even when LHX-specific fundamentals are unchanged. Always rebuild the position from current LHX chain quotes before placing a trade.
Frequently asked questions
- What is a collar on LHX?
- A collar on LHX is the collar strategy applied to LHX (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 LHX stock trading near $303.83, the strikes shown on this page are snapped to the nearest listed LHX chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are LHX 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 LHX collar priced from the end-of-day chain at a 30-day expiry (ATM IV 28.92%), the computed maximum profit is $1,537.00 per contract and the computed maximum loss is -$1,463.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a LHX collar?
- The breakeven for the LHX collar priced on this page is roughly $304.63 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 LHX market-implied 1-standard-deviation expected move is approximately 8.29%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on LHX?
- Collars on LHX hedge an existing long LHX 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 LHX implied volatility affect this collar?
- LHX ATM IV is at 28.92% with IV rank near 55.00%, 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.