NL Collar Strategy
NL (NL Industries, Inc.), in the Industrials sector, (Security & Protection Services industry), listed on NYSE.
NL Industries, Inc., through its subsidiary, CompX International Inc., operates in the component products industry in the United States and internationally. The company manufactures and sells mechanical and electronic cabinet locks, and other locking mechanisms, including disc tumbler locks, pin tumbler locking mechanisms, and CompX eLock and StealthLock electronic locks for use in various applications, such as ignition systems, mailboxes, file cabinets, desk drawers, tool storage cabinets, integrated inventory and access control secured narcotics boxes, vending and cash containment machines, medical cabinetry, electronic circuit panels, storage compartments, and gas station security. It also offers original equipment and aftermarket stainless steel exhaust headers, exhaust pipes, mufflers, and other exhaust components; gauges, such as GPS speedometers and tachometers; mechanical and electronic controls and throttles; wake enhancement devices, trim tabs, steering wheels, and other billet aluminum accessories; grab handles, pin cleats, and other accessories; and dash panels, LED indicators, wire harnesses, and other accessories primarily for performance and ski/wakeboard boats. In addition, the company offers insurance brokerage and risk management services. It sells its component products directly to original equipment manufacturers, as well as through distributors. NL Industries, Inc. was founded in 1891 and is based in Dallas, Texas.
NL (NL Industries, Inc.) trades in the Industrials sector, specifically Security & Protection Services, with a market capitalization of approximately $286.3M, a beta of 0.19 versus the broader market, a 52-week range of 5.04-8.45, average daily share volume of 42K, a public-listing history dating back to 1980, approximately 3K full-time employees. These structural characteristics shape how NL stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.19 indicates NL has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. NL pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on NL?
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 NL snapshot
As of May 15, 2026, spot at $7.71, ATM IV 84.50%, IV rank 17.93%, expected move 24.23%. The collar on NL 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 NL specifically: IV regime affects collar pricing on both sides; compressed NL IV at 84.50% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 24.23% (roughly $1.87 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 NL expiries trade a higher absolute premium for lower per-day decay. Position sizing on NL should anchor to the underlying notional of $7.71 per share and to the trader's directional view on NL stock.
NL collar setup
The NL 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 NL near $7.71, the first option leg uses a $8.10 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NL 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 NL shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $7.71 | long |
| Sell 1 | Call | $8.10 | N/A |
| Buy 1 | Put | $7.32 | N/A |
NL 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.
NL collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on NL. 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 NL
Collars on NL hedge an existing long NL 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.
NL thesis for this collar
The market-implied 1-standard-deviation range for NL extends from approximately $5.84 on the downside to $9.58 on the upside. A NL collar hedges an existing long NL 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 NL IV rank near 17.93% 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 NL at 84.50%. As a Industrials name, NL options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NL-specific events.
NL 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. NL positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move NL alongside the broader basket even when NL-specific fundamentals are unchanged. Always rebuild the position from current NL chain quotes before placing a trade.
Frequently asked questions
- What is a collar on NL?
- A collar on NL is the collar strategy applied to NL (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 NL stock trading near $7.71, the strikes shown on this page are snapped to the nearest listed NL chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are NL 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 NL collar priced from the end-of-day chain at a 30-day expiry (ATM IV 84.50%), 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 NL collar?
- The breakeven for the NL 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 NL market-implied 1-standard-deviation expected move is approximately 24.23%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on NL?
- Collars on NL hedge an existing long NL 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 NL implied volatility affect this collar?
- NL ATM IV is at 84.50% with IV rank near 17.93%, 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.