NEM Collar Strategy
NEM (Newmont Corporation), in the Basic Materials sector, (Gold industry), listed on NYSE.
Newmont Corporation engages in the production and exploration of gold. It also explores for copper, silver, zinc, and lead. The company has operations and/or assets in the United States, Canada, Mexico, Dominican Republic, Peru, Suriname, Argentina, Chile, Australia, and Ghana. As of December 31, 2021, it had proven and probable gold reserves of 92.8 million ounces and land position of 62,800 square kilometers. The company was founded in 1916 and is headquartered in Denver, Colorado.
NEM (Newmont Corporation) trades in the Basic Materials sector, specifically Gold, with a market capitalization of approximately $127.00B, a trailing P/E of 15.26, a beta of 0.45 versus the broader market, a 52-week range of 48.4-134.88, average daily share volume of 9.5M, a public-listing history dating back to 1980, approximately 44K full-time employees. These structural characteristics shape how NEM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.45 indicates NEM has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. NEM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on NEM?
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 NEM snapshot
As of May 15, 2026, spot at $109.04, ATM IV 46.66%, IV rank 51.62%, expected move 13.38%. The collar on NEM 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 28-day expiry.
Why this collar structure on NEM specifically: IV regime affects collar pricing on both sides; mid-range NEM IV at 46.66% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 13.38% (roughly $14.59 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated NEM expiries trade a higher absolute premium for lower per-day decay. Position sizing on NEM should anchor to the underlying notional of $109.04 per share and to the trader's directional view on NEM stock.
NEM collar setup
The NEM 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 NEM near $109.04, the first option leg uses a $114.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NEM chain at a 28-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 NEM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $109.04 | long |
| Sell 1 | Call | $114.00 | $3.88 |
| Buy 1 | Put | $104.00 | $3.21 |
NEM collar risk and reward
- Net Premium / Debit
- -$10,837.00
- Max Profit (per contract)
- $563.00
- Max Loss (per contract)
- -$437.00
- Breakeven(s)
- $108.37
- Risk / Reward Ratio
- 1.288
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.
NEM collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on NEM. 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% | -$437.00 |
| $24.12 | -77.9% | -$437.00 |
| $48.23 | -55.8% | -$437.00 |
| $72.33 | -33.7% | -$437.00 |
| $96.44 | -11.6% | -$437.00 |
| $120.55 | +10.6% | +$563.00 |
| $144.66 | +32.7% | +$563.00 |
| $168.77 | +54.8% | +$563.00 |
| $192.88 | +76.9% | +$563.00 |
| $216.98 | +99.0% | +$563.00 |
When traders use collar on NEM
Collars on NEM hedge an existing long NEM 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.
NEM thesis for this collar
The market-implied 1-standard-deviation range for NEM extends from approximately $94.45 on the downside to $123.63 on the upside. A NEM collar hedges an existing long NEM 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 NEM IV rank near 51.62% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on NEM should anchor more to the directional view and the expected-move geometry. As a Basic Materials name, NEM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NEM-specific events.
NEM 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. NEM positions also carry Basic Materials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move NEM alongside the broader basket even when NEM-specific fundamentals are unchanged. Always rebuild the position from current NEM chain quotes before placing a trade.
Frequently asked questions
- What is a collar on NEM?
- A collar on NEM is the collar strategy applied to NEM (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 NEM stock trading near $109.04, the strikes shown on this page are snapped to the nearest listed NEM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are NEM 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 NEM collar priced from the end-of-day chain at a 30-day expiry (ATM IV 46.66%), the computed maximum profit is $563.00 per contract and the computed maximum loss is -$437.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a NEM collar?
- The breakeven for the NEM collar priced on this page is roughly $108.37 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 NEM market-implied 1-standard-deviation expected move is approximately 13.38%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on NEM?
- Collars on NEM hedge an existing long NEM 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 NEM implied volatility affect this collar?
- NEM ATM IV is at 46.66% with IV rank near 51.62%, 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.