How are OTIS 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 OTIS collar priced from the end-of-day chain at a 30-day expiry (ATM IV 25.50%), the computed maximum profit is $396.50 per contract and the computed maximum loss is -$353.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a OTIS collar?

The breakeven for the OTIS collar priced on this page is roughly $71.04 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 OTIS market-implied 1-standard-deviation expected move is approximately 7.31%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current OTIS implied volatility affect this collar?

OTIS ATM IV is at 25.50% with IV rank near 67.51%, 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.

OTIS Collar Strategy

OTIS (Otis Worldwide Corporation), in the Industrials sector, (Industrial - Machinery industry), listed on NYSE.

Otis Worldwide Corporation manufactures, installs, and services elevators and escalators in the United States, China, and internationally. The company operates in two segments, New Equipment and Service. The New Equipment segment designs, manufactures, sells, and installs a range of passenger and freight elevators, as well as escalators and moving walkways for residential and commercial buildings, and infrastructure projects. The Service segment performs maintenance and repair services, as well as modernization services to upgrade elevators and escalators. It had a network of approximately 34,000 service mechanics operating approximately 1,400 branches and offices. The company was founded in 1853 and is headquartered in Farmington, Connecticut.

OTIS (Otis Worldwide Corporation) trades in the Industrials sector, specifically Industrial - Machinery, with a market capitalization of approximately $28.10B, a trailing P/E of 19.19, a beta of 0.94 versus the broader market, a 52-week range of 72.51-101.42, average daily share volume of 3.9M, a public-listing history dating back to 2020, approximately 72K full-time employees. These structural characteristics shape how OTIS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.94 places OTIS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. OTIS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a collar on OTIS?

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 OTIS snapshot

As of May 15, 2026, spot at $70.96, ATM IV 25.50%, IV rank 67.51%, expected move 7.31%. The collar on OTIS 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 OTIS specifically: IV regime affects collar pricing on both sides; mid-range OTIS IV at 25.50% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 7.31% (roughly $5.19 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 OTIS expiries trade a higher absolute premium for lower per-day decay. Position sizing on OTIS should anchor to the underlying notional of $70.96 per share and to the trader's directional view on OTIS stock.

OTIS collar setup

The OTIS 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 OTIS near $70.96, the first option leg uses a $75.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed OTIS 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 OTIS shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$70.96	long
Sell 1	Call	$75.00	$0.80
Buy 1	Put	$67.50	$0.88

OTIS collar risk and reward

Net Premium / Debit: -$7,103.50
Max Profit (per contract): $396.50
Max Loss (per contract): -$353.50
Breakeven(s): $71.04
Risk / Reward Ratio: 1.122

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.

OTIS collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on OTIS. 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%	-$353.50
$15.70	-77.9%	-$353.50
$31.39	-55.8%	-$353.50
$47.08	-33.7%	-$353.50
$62.76	-11.5%	-$353.50
$78.45	+10.6%	+$396.50
$94.14	+32.7%	+$396.50
$109.83	+54.8%	+$396.50
$125.52	+76.9%	+$396.50
$141.21	+99.0%	+$396.50

When traders use collar on OTIS

Collars on OTIS hedge an existing long OTIS 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.

OTIS thesis for this collar

The market-implied 1-standard-deviation range for OTIS extends from approximately $65.77 on the downside to $76.15 on the upside. A OTIS collar hedges an existing long OTIS 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 OTIS IV rank near 67.51% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on OTIS should anchor more to the directional view and the expected-move geometry. As a Industrials name, OTIS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to OTIS-specific events.

OTIS 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. OTIS positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move OTIS alongside the broader basket even when OTIS-specific fundamentals are unchanged. Always rebuild the position from current OTIS chain quotes before placing a trade.

Frequently asked questions

What is a collar on OTIS?: A collar on OTIS is the collar strategy applied to OTIS (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 OTIS stock trading near $70.96, the strikes shown on this page are snapped to the nearest listed OTIS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are OTIS 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 OTIS collar priced from the end-of-day chain at a 30-day expiry (ATM IV 25.50%), the computed maximum profit is $396.50 per contract and the computed maximum loss is -$353.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a OTIS collar?: The breakeven for the OTIS collar priced on this page is roughly $71.04 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 OTIS market-implied 1-standard-deviation expected move is approximately 7.31%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on OTIS?: Collars on OTIS hedge an existing long OTIS 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 OTIS implied volatility affect this collar?: OTIS ATM IV is at 25.50% with IV rank near 67.51%, 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.