PACB Collar Strategy
PACB (Pacific Biosciences of California, Inc.), in the Healthcare sector, (Medical - Devices industry), listed on NASDAQ.
Pacific Biosciences of California, Inc. (PACB) specializes in pioneering and manufacturing advanced genetic sequencing platforms, empowering researchers and institutions to unravel intricate genetic challenges. At the heart of its offerings are the proprietary PacBio Sequencing Systems, designed for executing, monitoring, and interpreting biochemical sequencing reactions. Complementing these instruments are essential consumable products, such as their unique single molecule real-time (SMRT) cells. Furthermore, the company supplies a comprehensive suite of workflow-specific reagent kits. These include template preparation kits, which utilize molecular biology reagents (like ligase, buffers, and exonucleases) to convert DNA into SMRTbell double-stranded DNA libraries. Binding kits, featuring modified DNA polymerase, facilitate the crucial attachment of SMRTbell libraries to the polymerase in readiness for sequencing.
PACB (Pacific Biosciences of California, Inc.) trades in the Healthcare sector, specifically Medical - Devices, with a market capitalization of approximately $512.5M, a beta of 2.32 versus the broader market, a 52-week range of 1.09-2.73, average daily share volume of 6.5M, a public-listing history dating back to 2010, approximately 575 full-time employees. These structural characteristics shape how PACB stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 2.32 indicates PACB has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a collar on PACB?
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 PACB snapshot
As of June 30, 2026, spot at $1.73, ATM IV 110.00%, IV rank 23.15%, expected move 31.54%. The collar on PACB 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 PACB specifically: IV regime affects collar pricing on both sides; compressed PACB IV at 110.00% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 31.54% (roughly $0.55 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 PACB expiries trade a higher absolute premium for lower per-day decay. Position sizing on PACB should anchor to the underlying notional of $1.73 per share and to the trader's directional view on PACB stock.
PACB collar setup
The PACB 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 PACB near $1.73, the first option leg uses a $1.82 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PACB 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 PACB shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $1.73 | long |
| Sell 1 | Call | $1.82 | N/A |
| Buy 1 | Put | $1.64 | N/A |
PACB 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.
PACB collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on PACB. 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 PACB
Collars on PACB hedge an existing long PACB 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.
PACB thesis for this collar
The market-implied 1-standard-deviation range for PACB extends from approximately $1.18 on the downside to $2.28 on the upside. A PACB collar hedges an existing long PACB 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 PACB IV rank near 23.15% 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 PACB at 110.00%. As a Healthcare name, PACB options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PACB-specific events.
PACB 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. PACB positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PACB alongside the broader basket even when PACB-specific fundamentals are unchanged. Always rebuild the position from current PACB chain quotes before placing a trade.
Frequently asked questions
- What is a collar on PACB?
- A collar on PACB is the collar strategy applied to PACB (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 PACB stock trading near $1.73, the strikes shown on this page are snapped to the nearest listed PACB chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are PACB 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 PACB collar priced from the end-of-day chain at a 30-day expiry (ATM IV 110.00%), 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 PACB collar?
- The breakeven for the PACB 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 PACB market-implied 1-standard-deviation expected move is approximately 31.54%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on PACB?
- Collars on PACB hedge an existing long PACB 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 PACB implied volatility affect this collar?
- PACB ATM IV is at 110.00% with IV rank near 23.15%, 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.