MLM Collar Strategy
MLM (Martin Marietta Materials, Inc.), in the Basic Materials sector, (Construction Materials industry), listed on NYSE.
Martin Marietta Materials, Inc., a natural resource-based building materials company, supplies aggregates and heavy-side building materials to the construction industry in the United States and internationally. It offers crushed stone, sand, and gravel products; ready mixed concrete and asphalt; paving products and services; and Portland and specialty cement for use in the infrastructure projects, and nonresidential and residential construction markets, as well as in the railroad, agricultural, utility, and environmental industries. The company also produces magnesia-based chemicals products that are used in industrial, agricultural, and environmental applications; and dolomitic lime primarily to customers for steel production and soil stabilization. Its chemical products are used in flame retardants, wastewater treatment, pulp and paper production, and other environmental applications. The company was founded in 1939 and is headquartered in Raleigh, North Carolina.
MLM (Martin Marietta Materials, Inc.) trades in the Basic Materials sector, specifically Construction Materials, with a market capitalization of approximately $34.63B, a trailing P/E of 13.73, a beta of 1.14 versus the broader market, a 52-week range of 532.8-710.97, average daily share volume of 529K, a public-listing history dating back to 1994, approximately 9K full-time employees. These structural characteristics shape how MLM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.14 places MLM roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. MLM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on MLM?
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 MLM snapshot
As of May 15, 2026, spot at $556.80, ATM IV 28.70%, IV rank 46.42%, expected move 8.23%. The collar on MLM 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 MLM specifically: IV regime affects collar pricing on both sides; mid-range MLM IV at 28.70% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 8.23% (roughly $45.81 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 MLM expiries trade a higher absolute premium for lower per-day decay. Position sizing on MLM should anchor to the underlying notional of $556.80 per share and to the trader's directional view on MLM stock.
MLM collar setup
The MLM 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 MLM near $556.80, the first option leg uses a $580.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MLM 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 MLM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $556.80 | long |
| Sell 1 | Call | $580.00 | $11.20 |
| Buy 1 | Put | $530.00 | $9.00 |
MLM collar risk and reward
- Net Premium / Debit
- -$55,460.00
- Max Profit (per contract)
- $2,540.00
- Max Loss (per contract)
- -$2,460.00
- Breakeven(s)
- $554.60
- Risk / Reward Ratio
- 1.033
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.
MLM collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on MLM. 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% | -$2,460.00 |
| $123.12 | -77.9% | -$2,460.00 |
| $246.23 | -55.8% | -$2,460.00 |
| $369.34 | -33.7% | -$2,460.00 |
| $492.45 | -11.6% | -$2,460.00 |
| $615.56 | +10.6% | +$2,540.00 |
| $738.67 | +32.7% | +$2,540.00 |
| $861.78 | +54.8% | +$2,540.00 |
| $984.89 | +76.9% | +$2,540.00 |
| $1,108.00 | +99.0% | +$2,540.00 |
When traders use collar on MLM
Collars on MLM hedge an existing long MLM 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.
MLM thesis for this collar
The market-implied 1-standard-deviation range for MLM extends from approximately $510.99 on the downside to $602.61 on the upside. A MLM collar hedges an existing long MLM 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 MLM IV rank near 46.42% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on MLM should anchor more to the directional view and the expected-move geometry. As a Basic Materials name, MLM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MLM-specific events.
MLM 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. MLM positions also carry Basic Materials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MLM alongside the broader basket even when MLM-specific fundamentals are unchanged. Always rebuild the position from current MLM chain quotes before placing a trade.
Frequently asked questions
- What is a collar on MLM?
- A collar on MLM is the collar strategy applied to MLM (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 MLM stock trading near $556.80, the strikes shown on this page are snapped to the nearest listed MLM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are MLM 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 MLM collar priced from the end-of-day chain at a 30-day expiry (ATM IV 28.70%), the computed maximum profit is $2,540.00 per contract and the computed maximum loss is -$2,460.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a MLM collar?
- The breakeven for the MLM collar priced on this page is roughly $554.60 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 MLM market-implied 1-standard-deviation expected move is approximately 8.23%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on MLM?
- Collars on MLM hedge an existing long MLM 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 MLM implied volatility affect this collar?
- MLM ATM IV is at 28.70% with IV rank near 46.42%, 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.