LRCX Collar Strategy
LRCX (Lam Research Corporation), in the Technology sector, (Semiconductors industry), listed on NASDAQ.
Lam Research Corporation designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits. The company offers ALTUS systems to deposit conformal films for tungsten metallization applications; SABRE electrochemical deposition products for copper interconnect transition that offers copper damascene manufacturing; SOLA ultraviolet thermal processing products for film treatments; and VECTOR plasma-enhanced CVD ALD products. It also provides SPEED gapfill high-density plasma chemical vapor deposition products; and Striker single-wafer atomic layer deposition products for dielectric film solutions. In addition, the company offers Flex for dielectric etch applications; Kiyo for conductor etch applications; Syndion for through-silicon via etch applications; and Versys metal products for metal etch processes. Further, it provides Coronus bevel clean products to enhance die yield; Da Vinci, DV-Prime, EOS, and SP series products to address various wafer cleaning applications; and Metryx mass metrology systems for high precision in-line mass measurement in semiconductor wafer manufacturing. The company sells its products and services to semiconductors industry in the United States, China, Europe, Japan, Korea, Southeast Asia, Taiwan, and internationally.
LRCX (Lam Research Corporation) trades in the Technology sector, specifically Semiconductors, with a market capitalization of approximately $369.47B, a trailing P/E of 55.04, a beta of 1.82 versus the broader market, a 52-week range of 79.49-300, average daily share volume of 10.0M, a public-listing history dating back to 1984, approximately 19K full-time employees. These structural characteristics shape how LRCX stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.82 indicates LRCX has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. The trailing P/E of 55.04 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple. LRCX pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on LRCX?
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 LRCX snapshot
As of May 15, 2026, spot at $285.73, ATM IV 64.61%, IV rank 73.71%, expected move 18.52%. The collar on LRCX 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 LRCX specifically: IV regime affects collar pricing on both sides; elevated LRCX IV at 64.61% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 18.52% (roughly $52.93 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 LRCX expiries trade a higher absolute premium for lower per-day decay. Position sizing on LRCX should anchor to the underlying notional of $285.73 per share and to the trader's directional view on LRCX stock.
LRCX collar setup
The LRCX 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 LRCX near $285.73, the first option leg uses a $300.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed LRCX 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 LRCX shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $285.73 | long |
| Sell 1 | Call | $300.00 | $15.00 |
| Buy 1 | Put | $270.00 | $12.63 |
LRCX collar risk and reward
- Net Premium / Debit
- -$28,335.50
- Max Profit (per contract)
- $1,664.50
- Max Loss (per contract)
- -$1,335.50
- Breakeven(s)
- $283.36
- Risk / Reward Ratio
- 1.246
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.
LRCX collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on LRCX. 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% | -$1,335.50 |
| $63.19 | -77.9% | -$1,335.50 |
| $126.36 | -55.8% | -$1,335.50 |
| $189.54 | -33.7% | -$1,335.50 |
| $252.71 | -11.6% | -$1,335.50 |
| $315.89 | +10.6% | +$1,664.50 |
| $379.06 | +32.7% | +$1,664.50 |
| $442.24 | +54.8% | +$1,664.50 |
| $505.41 | +76.9% | +$1,664.50 |
| $568.59 | +99.0% | +$1,664.50 |
When traders use collar on LRCX
Collars on LRCX hedge an existing long LRCX 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.
LRCX thesis for this collar
The market-implied 1-standard-deviation range for LRCX extends from approximately $232.80 on the downside to $338.66 on the upside. A LRCX collar hedges an existing long LRCX 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 LRCX IV rank near 73.71% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on LRCX at 64.61%. As a Technology name, LRCX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to LRCX-specific events.
LRCX 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. LRCX positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move LRCX alongside the broader basket even when LRCX-specific fundamentals are unchanged. Always rebuild the position from current LRCX chain quotes before placing a trade.
Frequently asked questions
- What is a collar on LRCX?
- A collar on LRCX is the collar strategy applied to LRCX (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 LRCX stock trading near $285.73, the strikes shown on this page are snapped to the nearest listed LRCX chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are LRCX 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 LRCX collar priced from the end-of-day chain at a 30-day expiry (ATM IV 64.61%), the computed maximum profit is $1,664.50 per contract and the computed maximum loss is -$1,335.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a LRCX collar?
- The breakeven for the LRCX collar priced on this page is roughly $283.36 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 LRCX market-implied 1-standard-deviation expected move is approximately 18.52%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on LRCX?
- Collars on LRCX hedge an existing long LRCX 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 LRCX implied volatility affect this collar?
- LRCX ATM IV is at 64.61% with IV rank near 73.71%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.