MMSI Collar Strategy
MMSI (Merit Medical Systems, Inc.), in the Healthcare sector, (Medical - Instruments & Supplies industry), listed on NASDAQ.
Merit Medical Systems, Inc. designs, develops, manufactures, and markets single-use medical products for interventional, diagnostic, and therapeutic procedures, primarily in cardiology, radiology, oncology, critical care, and endoscopy. The company operates in two segments, Cardiovascular and Endoscopy. It provides peripheral intervention products for the diagnosis and treatment of diseases in peripheral vessels and organs; and cardiac intervention products, such as access, angiography, electrophysiology and cardiac rhythm management, fluid management, hemodynamic monitoring, hemostasis, and intervention to treat various heart conditions. The company also offers custom procedural solutions that include critical care products, disinfection protection systems, syringes, manifold kits, and trays and packs; coated tubes and wires; and sensor components for microelectromechanical systems. In addition, it provides pulmonary products that consist of laser-cut tracheobronchial stents, over-the-wire and direct visualization delivery systems, and dilation balloons to endoscopically dilate strictures; gastroenterology products; and kits and accessories for endoscopy and bronchoscopy procedures. The company sells its products to hospitals and alternate site-based physicians, technicians, and nurses through direct sales force, distributors, original equipment manufacturer partners, or custom procedure tray manufacturers in the United States and internationally.
MMSI (Merit Medical Systems, Inc.) trades in the Healthcare sector, specifically Medical - Instruments & Supplies, with a market capitalization of approximately $3.74B, a trailing P/E of 26.74, a beta of 0.58 versus the broader market, a 52-week range of 59.74-100.05, average daily share volume of 817K, a public-listing history dating back to 1990, approximately 7K full-time employees. These structural characteristics shape how MMSI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.58 indicates MMSI 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 MMSI?
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 MMSI snapshot
As of May 15, 2026, spot at $61.30, ATM IV 35.40%, IV rank 5.03%, expected move 10.15%. The collar on MMSI 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 217-day expiry.
Why this collar structure on MMSI specifically: IV regime affects collar pricing on both sides; compressed MMSI IV at 35.40% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 10.15% (roughly $6.22 on the underlying). The 217-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated MMSI expiries trade a higher absolute premium for lower per-day decay. Position sizing on MMSI should anchor to the underlying notional of $61.30 per share and to the trader's directional view on MMSI stock.
MMSI collar setup
The MMSI 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 MMSI near $61.30, the first option leg uses a $65.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MMSI chain at a 217-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 MMSI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $61.30 | long |
| Sell 1 | Call | $65.00 | $6.05 |
| Buy 1 | Put | $60.00 | $5.55 |
MMSI collar risk and reward
- Net Premium / Debit
- -$6,080.00
- Max Profit (per contract)
- $420.00
- Max Loss (per contract)
- -$80.00
- Breakeven(s)
- $60.80
- Risk / Reward Ratio
- 5.250
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.
MMSI collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on MMSI. 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% | -$80.00 |
| $13.56 | -77.9% | -$80.00 |
| $27.12 | -55.8% | -$80.00 |
| $40.67 | -33.7% | -$80.00 |
| $54.22 | -11.5% | -$80.00 |
| $67.77 | +10.6% | +$420.00 |
| $81.33 | +32.7% | +$420.00 |
| $94.88 | +54.8% | +$420.00 |
| $108.43 | +76.9% | +$420.00 |
| $121.98 | +99.0% | +$420.00 |
When traders use collar on MMSI
Collars on MMSI hedge an existing long MMSI 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.
MMSI thesis for this collar
The market-implied 1-standard-deviation range for MMSI extends from approximately $55.08 on the downside to $67.52 on the upside. A MMSI collar hedges an existing long MMSI 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 MMSI IV rank near 5.03% 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 MMSI at 35.40%. As a Healthcare name, MMSI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MMSI-specific events.
MMSI 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. MMSI positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MMSI alongside the broader basket even when MMSI-specific fundamentals are unchanged. Always rebuild the position from current MMSI chain quotes before placing a trade.
Frequently asked questions
- What is a collar on MMSI?
- A collar on MMSI is the collar strategy applied to MMSI (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 MMSI stock trading near $61.30, the strikes shown on this page are snapped to the nearest listed MMSI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are MMSI 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 MMSI collar priced from the end-of-day chain at a 30-day expiry (ATM IV 35.40%), the computed maximum profit is $420.00 per contract and the computed maximum loss is -$80.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a MMSI collar?
- The breakeven for the MMSI collar priced on this page is roughly $60.80 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 MMSI market-implied 1-standard-deviation expected move is approximately 10.15%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on MMSI?
- Collars on MMSI hedge an existing long MMSI 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 MMSI implied volatility affect this collar?
- MMSI ATM IV is at 35.40% with IV rank near 5.03%, 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.