How are LULU 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 LULU collar priced from the end-of-day chain at a 30-day expiry (ATM IV 61.57%), the computed maximum profit is $573.00 per contract and the computed maximum loss is -$427.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a LULU collar?

The breakeven for the LULU collar priced on this page is roughly $119.27 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 LULU market-implied 1-standard-deviation expected move is approximately 17.65%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current LULU implied volatility affect this collar?

LULU ATM IV is at 61.57% with IV rank near 71.09%, 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.

LULU Collar Strategy

LULU (Lululemon Athletica Inc.), in the Consumer Cyclical sector, (Apparel - Retail industry), listed on NASDAQ.

lululemon athletica inc., together with its subsidiaries, designs, distributes, and retails athletic apparel and accessories for women and men. It operates in two segments, Company-Operated Stores and Direct to Consumer. The company offers pants, shorts, tops, and jackets for healthy lifestyle and athletic activities, such as yoga, running, and training, as well as other sweaty pursuits. It also provides fitness-related accessories and footwear. The company sells its products through a chain of company-operated stores; outlets and warehouse sales; interactive workout platform; a network of wholesale accounts, such as yoga studios, health clubs, and fitness centers; temporary locations; and license and supply arrangements, as well as directly to consumer through mobile apps and lululemon.com e-commerce website. As of January 30, 2022, it operated 574 company-operated stores under the lululemon brand in the United States, Canada, the People's Republic of China, Australia, the United Kingdom, Japan, New Zealand, Germany, South Korea, Singapore, France, Malaysia, Sweden, Ireland, the Netherlands, Norway, and Switzerland. lululemon athletica inc. was founded in 1998 and is based in Vancouver, Canada.

LULU (Lululemon Athletica Inc.) trades in the Consumer Cyclical sector, specifically Apparel - Retail, with a market capitalization of approximately $14.22B, a trailing P/E of 9.13, a beta of 0.90 versus the broader market, a 52-week range of 121.15-340.25, average daily share volume of 2.9M, a public-listing history dating back to 2007, approximately 39K full-time employees. These structural characteristics shape how LULU stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.90 places LULU roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 9.13 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price.

What is a collar on LULU?

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 LULU snapshot

As of May 15, 2026, spot at $119.22, ATM IV 61.57%, IV rank 71.09%, expected move 17.65%. The collar on LULU 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 LULU specifically: IV regime affects collar pricing on both sides; elevated LULU IV at 61.57% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 17.65% (roughly $21.04 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 LULU expiries trade a higher absolute premium for lower per-day decay. Position sizing on LULU should anchor to the underlying notional of $119.22 per share and to the trader's directional view on LULU stock.

LULU collar setup

The LULU 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 LULU near $119.22, the first option leg uses a $125.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed LULU 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 LULU shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$119.22	long
Sell 1	Call	$125.00	$6.00
Buy 1	Put	$115.00	$6.05

LULU collar risk and reward

Net Premium / Debit: -$11,927.00
Max Profit (per contract): $573.00
Max Loss (per contract): -$427.00
Breakeven(s): $119.27
Risk / Reward Ratio: 1.342

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.

LULU collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on LULU. 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%	-$427.00
$26.37	-77.9%	-$427.00
$52.73	-55.8%	-$427.00
$79.09	-33.7%	-$427.00
$105.45	-11.6%	-$427.00
$131.81	+10.6%	+$573.00
$158.16	+32.7%	+$573.00
$184.52	+54.8%	+$573.00
$210.88	+76.9%	+$573.00
$237.24	+99.0%	+$573.00

When traders use collar on LULU

Collars on LULU hedge an existing long LULU 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.

LULU thesis for this collar

The market-implied 1-standard-deviation range for LULU extends from approximately $98.18 on the downside to $140.26 on the upside. A LULU collar hedges an existing long LULU 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 LULU IV rank near 71.09% 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 LULU at 61.57%. As a Consumer Cyclical name, LULU options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to LULU-specific events.

LULU 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. LULU positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move LULU alongside the broader basket even when LULU-specific fundamentals are unchanged. Always rebuild the position from current LULU chain quotes before placing a trade.

Frequently asked questions

What is a collar on LULU?: A collar on LULU is the collar strategy applied to LULU (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 LULU stock trading near $119.22, the strikes shown on this page are snapped to the nearest listed LULU chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are LULU 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 LULU collar priced from the end-of-day chain at a 30-day expiry (ATM IV 61.57%), the computed maximum profit is $573.00 per contract and the computed maximum loss is -$427.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a LULU collar?: The breakeven for the LULU collar priced on this page is roughly $119.27 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 LULU market-implied 1-standard-deviation expected move is approximately 17.65%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on LULU?: Collars on LULU hedge an existing long LULU 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 LULU implied volatility affect this collar?: LULU ATM IV is at 61.57% with IV rank near 71.09%, 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.