MED Collar Strategy
MED (Medifast, Inc.), in the Consumer Cyclical sector, (Personal Products & Services industry), listed on NYSE.
Medifast, Inc., through its subsidiaries, manufactures and distributes weight loss, weight management, healthy living products, and other consumable health and nutritional products in the United States and the Asia-Pacific. The company offers bars, bites, pretzels, puffs, cereal crunch, drinks, hearty choices, oatmeal, pancakes, pudding, soft serves, shakes, smoothies, soft bakes, and soups under the OPTAVIA, Optimal Health by Take Shape for Life, and Flavors of Home brands. It markets its products through point-of-sale transactions over ecommerce platform. The company was founded in 1980 and is headquartered in Baltimore, Maryland.
MED (Medifast, Inc.) trades in the Consumer Cyclical sector, specifically Personal Products & Services, with a market capitalization of approximately $138.8M, a beta of 0.57 versus the broader market, a 52-week range of 9.22-15.46, average daily share volume of 255K, a public-listing history dating back to 1993, approximately 504 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 0.57 indicates MED 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 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.
Current MED snapshot
As of May 15, 2026, spot at $12.59, ATM IV 17.50%, IV rank 0.49%, expected move 5.02%. The collar on MED 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 MED specifically: IV regime affects collar pricing on both sides; compressed MED IV at 17.50% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 5.02% (roughly $0.63 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 MED expiries trade a higher absolute premium for lower per-day decay. Position sizing on MED should anchor to the underlying notional of $12.59 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 near $12.59, the first option leg uses a $13.22 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 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 MED shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $12.59 | long |
| Sell 1 | Call | $13.22 | N/A |
| Buy 1 | Put | $11.96 | 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 $11.96 on the downside to $13.22 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 0.49% 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 MED at 17.50%. As a Consumer Cyclical 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 Consumer Cyclical 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 trading near $12.59, the strikes shown on this page are snapped to the nearest listed MED chain strike and the premiums come straight from the end-of-day 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 17.50%), 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 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 MED market-implied 1-standard-deviation expected move is approximately 5.02%; 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 17.50% with IV rank near 0.49%, 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.