MD Collar Strategy
MD (Pediatrix Medical Group, Inc.), in the Healthcare sector, (Medical - Care Facilities industry), listed on NYSE.
Pediatrix Medical Group, Inc. delivers specialized medical services for newborns, expectant mothers, and pediatric patients across the United States and Puerto Rico. The company offers crucial neonatal care to critically ill or prematurely born infants within hospital units, staffed by expert neonatal subspecialists and advanced practice clinicians. For pregnant individuals and their developing babies, Pediatrix provides comprehensive maternal-fetal medicine services in both clinical and inpatient settings, involving specialists such as maternal-fetal medicine physicians, obstetricians, and genetic counselors. Furthermore, the group delivers pediatric cardiology services, addressing both congenital and acquired heart conditions in patients ranging from the fetal stage through adulthood, under the care of dedicated pediatric cardiologists. Beyond these core areas, Pediatrix extends its expertise to various other pediatric subspecialties, including those requiring intensivists, surgeons, and ophthalmologists, and supplies vital support to hospital departments like emergency rooms and labor and delivery units. Established in 1979 in Sunrise, Florida, and formerly known as MEDNAX, Inc. until its renaming in July 2022, the company managed a network of approximately 2,700 physicians as of February 2022.
MD (Pediatrix Medical Group, Inc.) trades in the Healthcare sector, specifically Medical - Care Facilities, with a market capitalization of approximately $2.03B, a trailing P/E of 11.77, a beta of 0.70 versus the broader market, a 52-week range of 11.84-24.99, average daily share volume of 798K, a public-listing history dating back to 1995, approximately 4K full-time employees. These structural characteristics shape how MD stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.70 indicates MD has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. The trailing P/E of 11.77 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 MD?
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 MD snapshot
As of June 30, 2026, spot at $25.16, ATM IV 56.70%, IV rank 27.23%, expected move 16.26%. The collar on MD 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 17-day expiry.
Why this collar structure on MD specifically: IV regime affects collar pricing on both sides; compressed MD IV at 56.70% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 16.26% (roughly $4.09 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated MD expiries trade a higher absolute premium for lower per-day decay. Position sizing on MD should anchor to the underlying notional of $25.16 per share and to the trader's directional view on MD stock.
MD collar setup
The MD 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 MD near $25.16, the first option leg uses a $26.42 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MD chain at a 17-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 MD shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $25.16 | long |
| Sell 1 | Call | $26.42 | N/A |
| Buy 1 | Put | $23.90 | N/A |
MD 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.
MD collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on MD. 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 MD
Collars on MD hedge an existing long MD 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.
MD thesis for this collar
The market-implied 1-standard-deviation range for MD extends from approximately $21.07 on the downside to $29.25 on the upside. A MD collar hedges an existing long MD 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 MD IV rank near 27.23% 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 MD at 56.70%. As a Healthcare name, MD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MD-specific events.
MD 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. MD positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MD alongside the broader basket even when MD-specific fundamentals are unchanged. Always rebuild the position from current MD chain quotes before placing a trade.
Frequently asked questions
- What is a collar on MD?
- A collar on MD is the collar strategy applied to MD (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 MD stock trading near $25.16, the strikes shown on this page are snapped to the nearest listed MD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are MD 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 MD collar priced from the end-of-day chain at a 30-day expiry (ATM IV 56.70%), 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 MD collar?
- The breakeven for the MD 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 MD market-implied 1-standard-deviation expected move is approximately 16.26%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on MD?
- Collars on MD hedge an existing long MD 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 MD implied volatility affect this collar?
- MD ATM IV is at 56.70% with IV rank near 27.23%, 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.