MPAA Collar Strategy
MPAA (Motorcar Parts of America, Inc.), in the Consumer Cyclical sector, (Auto - Parts industry), listed on NASDAQ.
Motorcar Parts of America, Inc. manufactures, remanufactures, and distributes heavy-duty truck, industrial, marine, and agricultural application replacement parts. The company offers rotating electrical products, including alternators and starters; wheel hub assemblies and bearings; and brake-related products comprising brake calipers, brake boosters, brake rotors, brake pads, and brake master cylinders. It also offers test solutions and diagnostic equipment for electric vehicle powertrain development and manufacturing, including electric motor test systems, e-axle test systems, advanced power emulators, and charging unit test systems, as well as test systems for alternators, starters, belt starter generator, and bench-top testers, as well as turbochargers and test services for electric vehicle inverters. The company sells its products to automotive retail chain stores and warehouse distributors, as well as various automobile manufacturers for their aftermarket programs and warranty replacement programs in North America. Motorcar Parts of America, Inc. was founded in 1968 and is headquartered in Torrance, California.
MPAA (Motorcar Parts of America, Inc.) trades in the Consumer Cyclical sector, specifically Auto - Parts, with a market capitalization of approximately $215.0M, a trailing P/E of 111.31, a beta of 1.23 versus the broader market, a 52-week range of 9.29-18.12, average daily share volume of 102K, a public-listing history dating back to 1994, approximately 6K full-time employees. These structural characteristics shape how MPAA stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.23 places MPAA roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 111.31 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple.
What is a collar on MPAA?
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 MPAA snapshot
As of May 15, 2026, spot at $11.04, ATM IV 92.60%, IV rank 43.91%, expected move 26.55%. The collar on MPAA 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 MPAA specifically: IV regime affects collar pricing on both sides; mid-range MPAA IV at 92.60% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 26.55% (roughly $2.93 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 MPAA expiries trade a higher absolute premium for lower per-day decay. Position sizing on MPAA should anchor to the underlying notional of $11.04 per share and to the trader's directional view on MPAA stock.
MPAA collar setup
The MPAA 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 MPAA near $11.04, the first option leg uses a $11.59 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MPAA 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 MPAA shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $11.04 | long |
| Sell 1 | Call | $11.59 | N/A |
| Buy 1 | Put | $10.49 | N/A |
MPAA 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.
MPAA collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on MPAA. 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 MPAA
Collars on MPAA hedge an existing long MPAA 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.
MPAA thesis for this collar
The market-implied 1-standard-deviation range for MPAA extends from approximately $8.11 on the downside to $13.97 on the upside. A MPAA collar hedges an existing long MPAA 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 MPAA IV rank near 43.91% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on MPAA should anchor more to the directional view and the expected-move geometry. As a Consumer Cyclical name, MPAA options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MPAA-specific events.
MPAA 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. MPAA positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MPAA alongside the broader basket even when MPAA-specific fundamentals are unchanged. Always rebuild the position from current MPAA chain quotes before placing a trade.
Frequently asked questions
- What is a collar on MPAA?
- A collar on MPAA is the collar strategy applied to MPAA (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 MPAA stock trading near $11.04, the strikes shown on this page are snapped to the nearest listed MPAA chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are MPAA 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 MPAA collar priced from the end-of-day chain at a 30-day expiry (ATM IV 92.60%), 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 MPAA collar?
- The breakeven for the MPAA 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 MPAA market-implied 1-standard-deviation expected move is approximately 26.55%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on MPAA?
- Collars on MPAA hedge an existing long MPAA 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 MPAA implied volatility affect this collar?
- MPAA ATM IV is at 92.60% with IV rank near 43.91%, 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.