PAGS Collar Strategy
PAGS (PagSeguro Digital Ltd.), in the Industrials sector, (Specialty Business Services industry), listed on NYSE.
PagSeguro Digital Ltd., together with its subsidiaries, engages in the provision of financial and payment solutions for consumers, individual entrepreneurs, micro-merchants, and small and medium-sized companies in Brazil and internationally. It provides digital banking solutions, including deposits, top-ups, debt management services, tax collections, wire transfers, ATM withdrawals, and various online and point-of-sale (POS) payment solutions; cards, such as debit, credit, cash, and prepaid cards; and credit products comprising FGTS withdrawals, payroll loans, working capital loans, and overdraft accounts. The company offers insurance services, including account, card, home, business, health assistance, life, and credit life insurance; investment services, such as investment and portfolio advisory, financial education, brokerage, fund management, treasury, and research services; and operates Shopping PagBank, a marketplace for various brands. In addition, it provides software solutions comprising PagVendas, a POS software app; ClubPag, a marketing tool that allows merchants to advertise across client base, available for POS devices; and PlugPag, a wireless solution that connects the machine to the commercial automation system, via Bluetooth technology. The company was founded in 2006 and is headquartered in São Paulo, Brazil.
PAGS (PagSeguro Digital Ltd.) trades in the Industrials sector, specifically Specialty Business Services, with a market capitalization of approximately $2.62B, a trailing P/E of 6.13, a beta of 1.30 versus the broader market, a 52-week range of 7.735-12.32, average daily share volume of 3.6M, a public-listing history dating back to 2018, approximately 7K full-time employees. These structural characteristics shape how PAGS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.30 places PAGS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 6.13 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. PAGS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on PAGS?
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 PAGS snapshot
As of June 29, 2026, spot at $9.02, ATM IV 467.50%, IV rank 98.82%, expected move 134.03%. The collar on PAGS 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 18-day expiry.
Why this collar structure on PAGS specifically: IV regime affects collar pricing on both sides; elevated PAGS IV at 467.50% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 134.03% (roughly $12.09 on the underlying). The 18-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated PAGS expiries trade a higher absolute premium for lower per-day decay. Position sizing on PAGS should anchor to the underlying notional of $9.02 per share and to the trader's directional view on PAGS stock.
PAGS collar setup
The PAGS 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 PAGS near $9.02, the first option leg uses a $9.47 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PAGS chain at a 18-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 PAGS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $9.02 | long |
| Sell 1 | Call | $9.47 | N/A |
| Buy 1 | Put | $8.57 | N/A |
PAGS 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.
PAGS collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on PAGS. 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 PAGS
Collars on PAGS hedge an existing long PAGS 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.
PAGS thesis for this collar
The market-implied 1-standard-deviation range for PAGS extends from approximately $-3.07 on the downside to $21.11 on the upside. A PAGS collar hedges an existing long PAGS 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 PAGS IV rank near 98.82% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on PAGS at 467.50%. As a Industrials name, PAGS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PAGS-specific events.
PAGS 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. PAGS positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PAGS alongside the broader basket even when PAGS-specific fundamentals are unchanged. Always rebuild the position from current PAGS chain quotes before placing a trade.
Frequently asked questions
- What is a collar on PAGS?
- A collar on PAGS is the collar strategy applied to PAGS (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 PAGS stock trading near $9.02, the strikes shown on this page are snapped to the nearest listed PAGS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are PAGS 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 PAGS collar priced from the end-of-day chain at a 30-day expiry (ATM IV 467.50%), 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 PAGS collar?
- The breakeven for the PAGS 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 PAGS market-implied 1-standard-deviation expected move is approximately 134.03%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on PAGS?
- Collars on PAGS hedge an existing long PAGS 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 PAGS implied volatility affect this collar?
- PAGS ATM IV is at 467.50% with IV rank near 98.82%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.