NJR Collar Strategy
NJR (New Jersey Resources Corporation), in the Utilities sector, (Regulated Gas industry), listed on NYSE.
New Jersey Resources Corporation, an energy services holding company, provides regulated gas distribution, and retail and wholesale energy services. The company operates through four segments: Natural Gas Distribution, Clean Energy Ventures, Energy Services, and Storage and Transportation. The Natural Gas Distribution segment offers regulated natural gas utility services to approximately 564,000 residential and commercial customers throughout Burlington, Middlesex, Monmouth, Morris, Ocean, and Sussex counties in New Jersey; provides capacity and storage management services; and participates in the off-system sales and capacity release markets. The Clean Energy Ventures segment invests in, owns, and operates commercial and residential solar projects situated in New Jersey, Connecticut, Rhode Island, and New York. The Energy Services segment offers unregulated wholesale energy management services to other energy companies and natural gas producers, as well as maintains and transacts a portfolio of physical assets consisting of natural gas storage and transportation contracts in the United States and Canada. The Storage and Transportation segment invests in natural gas transportation and storage facilities.
NJR (New Jersey Resources Corporation) trades in the Utilities sector, specifically Regulated Gas, with a market capitalization of approximately $5.77B, a trailing P/E of 16.89, a beta of 0.53 versus the broader market, a 52-week range of 43.46-57.85, average daily share volume of 538K, a public-listing history dating back to 1980, approximately 1K full-time employees. These structural characteristics shape how NJR stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.53 indicates NJR has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. NJR pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on NJR?
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 NJR snapshot
As of May 15, 2026, spot at $57.16, ATM IV 43.00%, IV rank 23.19%, expected move 12.33%. The collar on NJR 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 NJR specifically: IV regime affects collar pricing on both sides; compressed NJR IV at 43.00% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 12.33% (roughly $7.05 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 NJR expiries trade a higher absolute premium for lower per-day decay. Position sizing on NJR should anchor to the underlying notional of $57.16 per share and to the trader's directional view on NJR stock.
NJR collar setup
The NJR 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 NJR near $57.16, the first option leg uses a $60.02 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NJR 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 NJR shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $57.16 | long |
| Sell 1 | Call | $60.02 | N/A |
| Buy 1 | Put | $54.30 | N/A |
NJR 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.
NJR collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on NJR. 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 NJR
Collars on NJR hedge an existing long NJR 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.
NJR thesis for this collar
The market-implied 1-standard-deviation range for NJR extends from approximately $50.11 on the downside to $64.21 on the upside. A NJR collar hedges an existing long NJR 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 NJR IV rank near 23.19% 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 NJR at 43.00%. As a Utilities name, NJR options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NJR-specific events.
NJR 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. NJR positions also carry Utilities sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move NJR alongside the broader basket even when NJR-specific fundamentals are unchanged. Always rebuild the position from current NJR chain quotes before placing a trade.
Frequently asked questions
- What is a collar on NJR?
- A collar on NJR is the collar strategy applied to NJR (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 NJR stock trading near $57.16, the strikes shown on this page are snapped to the nearest listed NJR chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are NJR 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 NJR collar priced from the end-of-day chain at a 30-day expiry (ATM IV 43.00%), 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 NJR collar?
- The breakeven for the NJR 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 NJR market-implied 1-standard-deviation expected move is approximately 12.33%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on NJR?
- Collars on NJR hedge an existing long NJR 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 NJR implied volatility affect this collar?
- NJR ATM IV is at 43.00% with IV rank near 23.19%, 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.