MPC Collar Strategy
MPC (Marathon Petroleum Corporation), in the Energy sector, (Oil & Gas Refining & Marketing industry), listed on NYSE.
Marathon Petroleum Corporation, together with its subsidiaries, operates as an integrated downstream energy company primarily in the United States. It operates in two segments, Refining & Marketing, and Midstream. The Refining & Marketing segment refines crude oil and other feedstocks at its refineries in the Gulf Coast, Mid-Continent, and West Coast regions of the United States; and purchases refined products and ethanol for resale. Its refined products include transportation fuels, such as reformulated gasolines and blend-grade gasolines; heavy fuel oil; and asphalt. This segment also manufactures aromatics, propane, propylene, and sulfur. It sells refined products to wholesale marketing customers in the United States and internationally, buyers on the spot market, and independent entrepreneurs who operate primarily Marathon branded outlets, as well as through long-term fuel supply contracts to direct dealer locations primarily under the ARCO brand.
MPC (Marathon Petroleum Corporation) trades in the Energy sector, specifically Oil & Gas Refining & Marketing, with a market capitalization of approximately $72.72B, a trailing P/E of 15.86, a beta of 0.53 versus the broader market, a 52-week range of 154.65-261.61, average daily share volume of 2.6M, a public-listing history dating back to 2011, approximately 18K full-time employees. These structural characteristics shape how MPC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.53 indicates MPC has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. MPC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on MPC?
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 MPC snapshot
As of May 15, 2026, spot at $254.50, ATM IV 39.10%, IV rank 57.38%, expected move 11.21%. The collar on MPC 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 MPC specifically: IV regime affects collar pricing on both sides; mid-range MPC IV at 39.10% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 11.21% (roughly $28.53 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 MPC expiries trade a higher absolute premium for lower per-day decay. Position sizing on MPC should anchor to the underlying notional of $254.50 per share and to the trader's directional view on MPC stock.
MPC collar setup
The MPC 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 MPC near $254.50, the first option leg uses a $270.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MPC 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 MPC shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $254.50 | long |
| Sell 1 | Call | $270.00 | $5.85 |
| Buy 1 | Put | $240.00 | $6.00 |
MPC collar risk and reward
- Net Premium / Debit
- -$25,465.00
- Max Profit (per contract)
- $1,535.00
- Max Loss (per contract)
- -$1,465.00
- Breakeven(s)
- $254.65
- Risk / Reward Ratio
- 1.048
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.
MPC collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on MPC. 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% | -$1,465.00 |
| $56.28 | -77.9% | -$1,465.00 |
| $112.55 | -55.8% | -$1,465.00 |
| $168.82 | -33.7% | -$1,465.00 |
| $225.09 | -11.6% | -$1,465.00 |
| $281.36 | +10.6% | +$1,535.00 |
| $337.63 | +32.7% | +$1,535.00 |
| $393.90 | +54.8% | +$1,535.00 |
| $450.17 | +76.9% | +$1,535.00 |
| $506.44 | +99.0% | +$1,535.00 |
When traders use collar on MPC
Collars on MPC hedge an existing long MPC 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.
MPC thesis for this collar
The market-implied 1-standard-deviation range for MPC extends from approximately $225.97 on the downside to $283.03 on the upside. A MPC collar hedges an existing long MPC 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 MPC IV rank near 57.38% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on MPC should anchor more to the directional view and the expected-move geometry. As a Energy name, MPC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MPC-specific events.
MPC 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. MPC positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MPC alongside the broader basket even when MPC-specific fundamentals are unchanged. Always rebuild the position from current MPC chain quotes before placing a trade.
Frequently asked questions
- What is a collar on MPC?
- A collar on MPC is the collar strategy applied to MPC (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 MPC stock trading near $254.50, the strikes shown on this page are snapped to the nearest listed MPC chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are MPC 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 MPC collar priced from the end-of-day chain at a 30-day expiry (ATM IV 39.10%), the computed maximum profit is $1,535.00 per contract and the computed maximum loss is -$1,465.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a MPC collar?
- The breakeven for the MPC collar priced on this page is roughly $254.65 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 MPC market-implied 1-standard-deviation expected move is approximately 11.21%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on MPC?
- Collars on MPC hedge an existing long MPC 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 MPC implied volatility affect this collar?
- MPC ATM IV is at 39.10% with IV rank near 57.38%, 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.