MRCY Collar Strategy
MRCY (Mercury Systems, Inc.), in the Industrials sector, (Aerospace & Defense industry), listed on NASDAQ.
Mercury Systems, Inc., a technology company, manufactures and sells components, products, modules, and subsystems for aerospace and defense industries in the United States, Europe, and the Asia Pacific. Its products and solutions are deployed in approximately 300 programs with 25 defense contractors and commercial aviation customers. The company offers components, including power amplifiers and limiters, switches, oscillators, filters, equalizers, digital and analog converters, chips, monolithic microwave integrated circuits, and memory and storage devices; modules and sub-assemblies, such as embedded processing modules and boards, switched fabric boards, digital receiver boards, multi-chip modules, integrated radio frequency and microwave multi-function assemblies, tuners, and transceivers, as well as graphics and video processing, and Ethernet and input-output boards; and integrated subsystems. It also designs and develops digital radio frequency memory units for various modern electronic warfare applications; radar environment simulation and test systems for defense and intelligence applications; and signals intelligence payloads and EO/IR technologies for small UAV platforms, as well as onboard UAV processor systems for real-time wide area motion imagery. The company was formerly known as Mercury Computer Systems, Inc. and changed its name to Mercury Systems, Inc. in November 2012. Mercury Systems, Inc. was incorporated in 1981 and is headquartered in Andover, Massachusetts.
MRCY (Mercury Systems, Inc.) trades in the Industrials sector, specifically Aerospace & Defense, with a market capitalization of approximately $5.55B, a beta of 0.83 versus the broader market, a 52-week range of 44.01-103.84, average daily share volume of 568K, a public-listing history dating back to 1998, approximately 2K full-time employees. These structural characteristics shape how MRCY stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.83 places MRCY roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a collar on MRCY?
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 MRCY snapshot
As of May 15, 2026, spot at $91.99, ATM IV 54.10%, IV rank 24.73%, expected move 15.51%. The collar on MRCY 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 MRCY specifically: IV regime affects collar pricing on both sides; compressed MRCY IV at 54.10% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 15.51% (roughly $14.27 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 MRCY expiries trade a higher absolute premium for lower per-day decay. Position sizing on MRCY should anchor to the underlying notional of $91.99 per share and to the trader's directional view on MRCY stock.
MRCY collar setup
The MRCY 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 MRCY near $91.99, the first option leg uses a $97.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MRCY 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 MRCY shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $91.99 | long |
| Sell 1 | Call | $97.50 | $3.80 |
| Buy 1 | Put | $87.50 | $4.10 |
MRCY collar risk and reward
- Net Premium / Debit
- -$9,229.00
- Max Profit (per contract)
- $521.00
- Max Loss (per contract)
- -$479.00
- Breakeven(s)
- $92.29
- Risk / Reward Ratio
- 1.088
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.
MRCY collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on MRCY. 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% | -$479.00 |
| $20.35 | -77.9% | -$479.00 |
| $40.69 | -55.8% | -$479.00 |
| $61.03 | -33.7% | -$479.00 |
| $81.36 | -11.6% | -$479.00 |
| $101.70 | +10.6% | +$521.00 |
| $122.04 | +32.7% | +$521.00 |
| $142.38 | +54.8% | +$521.00 |
| $162.72 | +76.9% | +$521.00 |
| $183.06 | +99.0% | +$521.00 |
When traders use collar on MRCY
Collars on MRCY hedge an existing long MRCY 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.
MRCY thesis for this collar
The market-implied 1-standard-deviation range for MRCY extends from approximately $77.72 on the downside to $106.26 on the upside. A MRCY collar hedges an existing long MRCY 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 MRCY IV rank near 24.73% 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 MRCY at 54.10%. As a Industrials name, MRCY options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MRCY-specific events.
MRCY 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. MRCY positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MRCY alongside the broader basket even when MRCY-specific fundamentals are unchanged. Always rebuild the position from current MRCY chain quotes before placing a trade.
Frequently asked questions
- What is a collar on MRCY?
- A collar on MRCY is the collar strategy applied to MRCY (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 MRCY stock trading near $91.99, the strikes shown on this page are snapped to the nearest listed MRCY chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are MRCY 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 MRCY collar priced from the end-of-day chain at a 30-day expiry (ATM IV 54.10%), the computed maximum profit is $521.00 per contract and the computed maximum loss is -$479.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a MRCY collar?
- The breakeven for the MRCY collar priced on this page is roughly $92.29 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 MRCY market-implied 1-standard-deviation expected move is approximately 15.51%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on MRCY?
- Collars on MRCY hedge an existing long MRCY 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 MRCY implied volatility affect this collar?
- MRCY ATM IV is at 54.10% with IV rank near 24.73%, 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.