How are MPWR 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 MPWR collar priced from the end-of-day chain at a 30-day expiry (ATM IV 57.60%), the computed maximum profit is $8,942.00 per contract and the computed maximum loss is -$7,058.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a MPWR collar?

The breakeven for the MPWR collar priced on this page is roughly $1,550.58 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 MPWR market-implied 1-standard-deviation expected move is approximately 16.51%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current MPWR implied volatility affect this collar?

MPWR ATM IV is at 57.60% with IV rank near 49.87%, 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.

MPWR Collar Strategy

MPWR (Monolithic Power Systems, Inc.), in the Technology sector, (Semiconductors industry), listed on NASDAQ.

Monolithic Power Systems, Inc. engages in the design, development, marketing, and sale of semiconductor-based power electronics solutions for the computing and storage, automotive, industrial, communications, and consumer markets. The company provides direct current (DC) to DC integrated circuits (ICs) that are used to convert and control voltages of various electronic systems, such as portable electronic devices, wireless LAN access points, computers and notebooks, monitors, infotainment applications, and medical equipment. It also offers lighting control ICs for backlighting that are used in systems, which provide the light source for LCD panels in notebook computers, monitors, car navigation systems, and televisions, as well as for general illumination products. The company sells its products through third-party distributors and value-added resellers, as well as directly to original equipment manufacturers, original design manufacturers, electronic manufacturing service providers, and other end customers in China, Taiwan, Europe, South Korea, Southeast Asia, Japan, the United States, and internationally. Monolithic Power Systems, Inc. was incorporated in 1997 and is headquartered in Kirkland, Washington.

MPWR (Monolithic Power Systems, Inc.) trades in the Technology sector, specifically Semiconductors, with a market capitalization of approximately $81.08B, a trailing P/E of 119.98, a beta of 1.74 versus the broader market, a 52-week range of 643.36-1675.42, average daily share volume of 571K, a public-listing history dating back to 2004, approximately 4K full-time employees. These structural characteristics shape how MPWR stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.74 indicates MPWR has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. The trailing P/E of 119.98 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. MPWR pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a collar on MPWR?

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 MPWR snapshot

As of May 15, 2026, spot at $1,562.83, ATM IV 57.60%, IV rank 49.87%, expected move 16.51%. The collar on MPWR 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 MPWR specifically: IV regime affects collar pricing on both sides; mid-range MPWR IV at 57.60% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 16.51% (roughly $258.08 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 MPWR expiries trade a higher absolute premium for lower per-day decay. Position sizing on MPWR should anchor to the underlying notional of $1,562.83 per share and to the trader's directional view on MPWR stock.

MPWR collar setup

The MPWR 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 MPWR near $1,562.83, the first option leg uses a $1,640.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MPWR 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 MPWR shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$1,562.83	long
Sell 1	Call	$1,640.00	$81.30
Buy 1	Put	$1,480.00	$69.05

MPWR collar risk and reward

Net Premium / Debit: -$155,058.00
Max Profit (per contract): $8,942.00
Max Loss (per contract): -$7,058.00
Breakeven(s): $1,550.58
Risk / Reward Ratio: 1.267

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.

MPWR collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on MPWR. 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%	-$7,058.00
$345.56	-77.9%	-$7,058.00
$691.11	-55.8%	-$7,058.00
$1,036.66	-33.7%	-$7,058.00
$1,382.21	-11.6%	-$7,058.00
$1,727.76	+10.6%	+$8,942.00
$2,073.31	+32.7%	+$8,942.00
$2,418.85	+54.8%	+$8,942.00
$2,764.40	+76.9%	+$8,942.00
$3,109.95	+99.0%	+$8,942.00

When traders use collar on MPWR

Collars on MPWR hedge an existing long MPWR 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.

MPWR thesis for this collar

The market-implied 1-standard-deviation range for MPWR extends from approximately $1,304.75 on the downside to $1,820.91 on the upside. A MPWR collar hedges an existing long MPWR 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 MPWR IV rank near 49.87% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on MPWR should anchor more to the directional view and the expected-move geometry. As a Technology name, MPWR options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MPWR-specific events.

MPWR 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. MPWR positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MPWR alongside the broader basket even when MPWR-specific fundamentals are unchanged. Always rebuild the position from current MPWR chain quotes before placing a trade.

Frequently asked questions

What is a collar on MPWR?: A collar on MPWR is the collar strategy applied to MPWR (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 MPWR stock trading near $1,562.83, the strikes shown on this page are snapped to the nearest listed MPWR chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are MPWR 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 MPWR collar priced from the end-of-day chain at a 30-day expiry (ATM IV 57.60%), the computed maximum profit is $8,942.00 per contract and the computed maximum loss is -$7,058.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a MPWR collar?: The breakeven for the MPWR collar priced on this page is roughly $1,550.58 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 MPWR market-implied 1-standard-deviation expected move is approximately 16.51%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on MPWR?: Collars on MPWR hedge an existing long MPWR 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 MPWR implied volatility affect this collar?: MPWR ATM IV is at 57.60% with IV rank near 49.87%, 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.