MED Collar Strategy
MED (Medifast, Inc.), in the Industrials sector, (Personal Products & Services industry), listed on NYSE.
Medifast, Inc., through its various divisions, develops and provides a range of consumable health and nutritional items tailored for weight loss, weight management, and general wellness. These products are distributed across the United States and the Asia-Pacific region. Their extensive portfolio encompasses snack bars, savory bites, cereals, drinks, substantial meal choices, oatmeal, pancakes, puddings, soft serves, shakes, smoothies, baked goods, and soups. These offerings are marketed under proprietary brands like OPTAVIA, Optimal Health by Take Shape for Life, and Flavors of Home. The company facilitates sales primarily through direct e-commerce transactions. Established in 1980, Medifast, Inc. maintains its corporate headquarters in Baltimore, Maryland.
MED (Medifast, Inc.) trades in the Industrials sector, specifically Personal Products & Services, with a market capitalization of approximately $128.9M, a beta of 0.70 versus the broader market, a 52-week range of 9.22-14.67, average daily share volume of 224K, a public-listing history dating back to 1993, approximately 380 full-time employees. These structural characteristics shape how MED stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.70 indicates MED has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. MED pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on MED?
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.
MED snapshot
As of August 14, 2026, spot at $11.48, ATM IV 170.70%, IV rank 35.17%, expected move 10.71%. The collar on MED below is built from the end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this collar structure on MED specifically: IV regime affects collar pricing on both sides; mid-range MED IV at 170.70% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 10.71% (roughly $1.23 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated MED expiries trade a higher absolute premium for lower per-day decay. Position sizing on MED should anchor to the underlying notional of $11.48 per share and to the trader's directional view on MED stock.
MED collar setup
The MED 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 MED at $11.48 on that close, the first option leg uses a $12.05 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MED chain at a 35-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 MED shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $11.48 | long |
| Sell 1 | Call | $12.05 | N/A |
| Buy 1 | Put | $10.91 | N/A |
MED 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.
MED collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on MED. 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 MED
Collars on MED hedge an existing long MED 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.
MED thesis for this collar
The market-implied 1-standard-deviation range for MED extends from approximately $10.25 on the downside to $12.71 on the upside. A MED collar hedges an existing long MED 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 MED IV rank near 35.17% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on MED should anchor more to the directional view and the expected-move geometry. As a Industrials name, MED options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MED-specific events.
MED 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. MED positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MED alongside the broader basket even when MED-specific fundamentals are unchanged. Always rebuild the position from current MED chain quotes before placing a trade.
Frequently asked questions
- What is a collar on MED?
- A collar on MED is the collar strategy applied to MED (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 MED stock at $11.48 on the most recent close, the strikes shown on this page are snapped to the nearest listed MED chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are MED 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 MED collar priced from the end-of-day chain at a 30-day expiry (ATM IV 170.70%), 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 MED collar?
- The breakeven for the MED collar priced on this page is no defined breakeven on the modeled curve at expiration, derived from the end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The MED market-implied 1-standard-deviation expected move in the same options snapshot is approximately 10.71%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on MED?
- Collars on MED hedge an existing long MED 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 MED implied volatility affect this collar?
- MED ATM IV is at 170.70% with IV rank near 35.17%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.