LILA Collar Strategy
LILA (Liberty Latin America Ltd.), in the Communication Services sector, (Telecommunications Services industry), listed on NASDAQ.
Liberty Latin America Ltd., together with its subsidiaries, provides fixed, mobile, and subsea telecommunications services. The company operates through C&W Caribbean and Networks, C&W Panama, Liberty Puerto Rico, VTR, and Costa Rica segments. It offers communications and entertainment services, including video, broadband internet, fixed-line telephony, and mobile services to residential and business customers; and business products and services that include enterprise-grade connectivity, data center, hosting, and managed solutions, as well as information technology solutions for small and medium enterprises, international companies, and governmental agencies. The company also operates a sub-sea and terrestrial fiber optic cable network that connects approximately 40 markets. It provides its services in approximately 20 countries in Latin America, the Caribbean, Chile, and Costa Rica under the brands of C&W, VTR, Liberty Puerto Rico, Cabletica, BTC, UTS, Flow, and Móvil. The company was incorporated in 2017 and is based in Hamilton, Bermuda.
LILA (Liberty Latin America Ltd.) trades in the Communication Services sector, specifically Telecommunications Services, with a market capitalization of approximately $1.51B, a beta of 0.75 versus the broader market, a 52-week range of 4.81-9.04, average daily share volume of 303K, a public-listing history dating back to 2015, approximately 10K full-time employees. These structural characteristics shape how LILA stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.75 places LILA roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a collar on LILA?
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 LILA snapshot
As of May 15, 2026, spot at $7.21, ATM IV 70.30%, IV rank 17.09%, expected move 20.15%. The collar on LILA 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 LILA specifically: IV regime affects collar pricing on both sides; compressed LILA IV at 70.30% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 20.15% (roughly $1.45 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 LILA expiries trade a higher absolute premium for lower per-day decay. Position sizing on LILA should anchor to the underlying notional of $7.21 per share and to the trader's directional view on LILA stock.
LILA collar setup
The LILA 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 LILA near $7.21, the first option leg uses a $7.57 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed LILA 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 LILA shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $7.21 | long |
| Sell 1 | Call | $7.57 | N/A |
| Buy 1 | Put | $6.85 | N/A |
LILA 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.
LILA collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on LILA. 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 LILA
Collars on LILA hedge an existing long LILA 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.
LILA thesis for this collar
The market-implied 1-standard-deviation range for LILA extends from approximately $5.76 on the downside to $8.66 on the upside. A LILA collar hedges an existing long LILA 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 LILA IV rank near 17.09% 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 LILA at 70.30%. As a Communication Services name, LILA options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to LILA-specific events.
LILA 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. LILA positions also carry Communication Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move LILA alongside the broader basket even when LILA-specific fundamentals are unchanged. Always rebuild the position from current LILA chain quotes before placing a trade.
Frequently asked questions
- What is a collar on LILA?
- A collar on LILA is the collar strategy applied to LILA (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 LILA stock trading near $7.21, the strikes shown on this page are snapped to the nearest listed LILA chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are LILA 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 LILA collar priced from the end-of-day chain at a 30-day expiry (ATM IV 70.30%), 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 LILA collar?
- The breakeven for the LILA 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 LILA market-implied 1-standard-deviation expected move is approximately 20.15%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on LILA?
- Collars on LILA hedge an existing long LILA 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 LILA implied volatility affect this collar?
- LILA ATM IV is at 70.30% with IV rank near 17.09%, 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.