MDGL Collar Strategy
MDGL (Madrigal Pharmaceuticals, Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Madrigal Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, focuses on the development and commercialization of therapeutic candidates for the treatment of cardiovascular, metabolic, and liver diseases. Its lead product candidate is resmetirom, a liver-directed selective thyroid hormone receptor-ß agonist, which is in Phase III clinical trials for the treatment of non-alcoholic steatohepatitis. The company also develops MGL-3745, a backup compound to resmetirom. It has research, development, and commercialization agreement with Hoffmann-La Roche. Madrigal Pharmaceuticals, Inc. is headquartered in West Conshohocken, Pennsylvania.
MDGL (Madrigal Pharmaceuticals, Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $11.96B, a beta of -1.05 versus the broader market, a 52-week range of 265-615, average daily share volume of 349K, a public-listing history dating back to 2007, approximately 528 full-time employees. These structural characteristics shape how MDGL stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of -1.05 indicates MDGL has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure.
What is a collar on MDGL?
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 MDGL snapshot
As of May 15, 2026, spot at $526.50, ATM IV 42.90%, IV rank 13.39%, expected move 12.30%. The collar on MDGL 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 MDGL specifically: IV regime affects collar pricing on both sides; compressed MDGL IV at 42.90% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 12.30% (roughly $64.75 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 MDGL expiries trade a higher absolute premium for lower per-day decay. Position sizing on MDGL should anchor to the underlying notional of $526.50 per share and to the trader's directional view on MDGL stock.
MDGL collar setup
The MDGL 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 MDGL near $526.50, the first option leg uses a $550.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MDGL 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 MDGL shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $526.50 | long |
| Sell 1 | Call | $550.00 | $18.90 |
| Buy 1 | Put | $500.00 | $14.50 |
MDGL collar risk and reward
- Net Premium / Debit
- -$52,210.00
- Max Profit (per contract)
- $2,790.00
- Max Loss (per contract)
- -$2,210.00
- Breakeven(s)
- $522.10
- Risk / Reward Ratio
- 1.262
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.
MDGL collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on MDGL. 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% | -$2,210.00 |
| $116.42 | -77.9% | -$2,210.00 |
| $232.83 | -55.8% | -$2,210.00 |
| $349.24 | -33.7% | -$2,210.00 |
| $465.65 | -11.6% | -$2,210.00 |
| $582.06 | +10.6% | +$2,790.00 |
| $698.48 | +32.7% | +$2,790.00 |
| $814.89 | +54.8% | +$2,790.00 |
| $931.30 | +76.9% | +$2,790.00 |
| $1,047.71 | +99.0% | +$2,790.00 |
When traders use collar on MDGL
Collars on MDGL hedge an existing long MDGL 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.
MDGL thesis for this collar
The market-implied 1-standard-deviation range for MDGL extends from approximately $461.75 on the downside to $591.25 on the upside. A MDGL collar hedges an existing long MDGL 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 MDGL IV rank near 13.39% 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 MDGL at 42.90%. As a Healthcare name, MDGL options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MDGL-specific events.
MDGL 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. MDGL positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MDGL alongside the broader basket even when MDGL-specific fundamentals are unchanged. Always rebuild the position from current MDGL chain quotes before placing a trade.
Frequently asked questions
- What is a collar on MDGL?
- A collar on MDGL is the collar strategy applied to MDGL (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 MDGL stock trading near $526.50, the strikes shown on this page are snapped to the nearest listed MDGL chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are MDGL 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 MDGL collar priced from the end-of-day chain at a 30-day expiry (ATM IV 42.90%), the computed maximum profit is $2,790.00 per contract and the computed maximum loss is -$2,210.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a MDGL collar?
- The breakeven for the MDGL collar priced on this page is roughly $522.10 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 MDGL market-implied 1-standard-deviation expected move is approximately 12.30%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on MDGL?
- Collars on MDGL hedge an existing long MDGL 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 MDGL implied volatility affect this collar?
- MDGL ATM IV is at 42.90% with IV rank near 13.39%, 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.