NGS Collar Strategy
NGS (Natural Gas Services Group, Inc.), in the Energy sector, (Oil & Gas Equipment & Services industry), listed on NYSE.
Natural Gas Services Group, Inc. (NGS) is a U.S.-based company that specializes in providing natural gas compression solutions and equipment to the energy sector. NGS's activities encompass the full lifecycle of natural gas compressors and associated gear, including their design, manufacturing, rental, and sale. A significant portion of its operations centers on the rental of compression units, which cater to small, medium, and large horsepower requirements, primarily supporting unconventional oil and natural gas extraction. As of December 31, 2021, NGS maintained a substantial rental fleet comprising 2,023 natural gas compression units, collectively generating 418,041 horsepower. Beyond rental, NGS is also involved in the engineering, fabrication, and assembly of compressor components, which are then integrated into full compressor units for either rental or direct sale. The company further designs and manufactures its own range of reciprocating compressor frames, cylinders, and various parts.
NGS (Natural Gas Services Group, Inc.) trades in the Energy sector, specifically Oil & Gas Equipment & Services, with a market capitalization of approximately $554.2M, a trailing P/E of 25.35, a beta of 0.41 versus the broader market, a 52-week range of 22.72-44.61, average daily share volume of 106K, a public-listing history dating back to 2002, approximately 245 full-time employees. These structural characteristics shape how NGS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.41 indicates NGS has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. NGS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on NGS?
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 NGS snapshot
As of June 30, 2026, spot at $43.27, ATM IV 39.40%, IV rank 24.63%, expected move 11.30%. The collar on NGS 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 17-day expiry.
Why this collar structure on NGS specifically: IV regime affects collar pricing on both sides; compressed NGS IV at 39.40% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 11.30% (roughly $4.89 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated NGS expiries trade a higher absolute premium for lower per-day decay. Position sizing on NGS should anchor to the underlying notional of $43.27 per share and to the trader's directional view on NGS stock.
NGS collar setup
The NGS 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 NGS near $43.27, the first option leg uses a $45.43 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NGS chain at a 17-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 NGS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $43.27 | long |
| Sell 1 | Call | $45.43 | N/A |
| Buy 1 | Put | $41.11 | N/A |
NGS 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.
NGS collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on NGS. 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 NGS
Collars on NGS hedge an existing long NGS 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.
NGS thesis for this collar
The market-implied 1-standard-deviation range for NGS extends from approximately $38.38 on the downside to $48.16 on the upside. A NGS collar hedges an existing long NGS 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 NGS IV rank near 24.63% 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 NGS at 39.40%. As a Energy name, NGS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NGS-specific events.
NGS 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. NGS positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move NGS alongside the broader basket even when NGS-specific fundamentals are unchanged. Always rebuild the position from current NGS chain quotes before placing a trade.
Frequently asked questions
- What is a collar on NGS?
- A collar on NGS is the collar strategy applied to NGS (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 NGS stock trading near $43.27, the strikes shown on this page are snapped to the nearest listed NGS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are NGS 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 NGS collar priced from the end-of-day chain at a 30-day expiry (ATM IV 39.40%), 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 NGS collar?
- The breakeven for the NGS 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 NGS market-implied 1-standard-deviation expected move is approximately 11.30%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on NGS?
- Collars on NGS hedge an existing long NGS 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 NGS implied volatility affect this collar?
- NGS ATM IV is at 39.40% with IV rank near 24.63%, 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.