PAYC Collar Strategy
PAYC (Paycom Software, Inc.), in the Technology sector, (Software - Application industry), listed on NYSE.
Paycom Software, Inc., established in 1998 and headquartered in Oklahoma City, Oklahoma, provides a comprehensive, cloud-based human capital management (HCM) platform. This software-as-a-service (SaaS) solution is specifically tailored for small to mid-sized businesses across the United States. It equips organizations with the essential functionality and analytical insights needed to oversee the complete employee journey, from the initial hiring process through to retirement. The robust HCM suite encompasses a wide array of applications across several critical HR domains. For talent acquisition and onboarding, it offers tools such as applicant tracking, candidate management, background checks, seamless onboarding processes, E-Verify compliance, and tax credit services. Time and labor management capabilities include precise time and attendance tracking, flexible scheduling with exchange options, efficient time-off request management, labor allocation, detailed reporting (including push reports), and advanced location-based features like geofencing, geotracking, and their proprietary Microfence Bluetooth technology.
PAYC (Paycom Software, Inc.) trades in the Technology sector, specifically Software - Application, with a market capitalization of approximately $9.52B, a trailing P/E of 19.85, a beta of 0.73 versus the broader market, a 52-week range of 104.9-234.6, average daily share volume of 983K, a public-listing history dating back to 2014, approximately 6K full-time employees. These structural characteristics shape how PAYC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.73 places PAYC roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. PAYC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on PAYC?
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.
PAYC snapshot
As of August 14, 2026, spot at $218.04, ATM IV 43.80%, IV rank 19.78%, expected move 12.56%. The collar on PAYC below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this collar structure on PAYC specifically: IV regime affects collar pricing on both sides; compressed PAYC IV at 43.80% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 12.56% (roughly $27.38 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated PAYC expiries trade a higher absolute premium for lower per-day decay. Position sizing on PAYC should anchor to the underlying notional of $218.04 per share and to the trader's directional view on PAYC stock.
PAYC collar setup
The PAYC collar below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With PAYC at $218.04 on that close, the first option leg uses a $230.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PAYC chain at a 35-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 PAYC shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $218.04 | long |
| Sell 1 | Call | $230.00 | $7.50 |
| Buy 1 | Put | $210.00 | $7.65 |
PAYC collar risk and reward
- Net Premium / Debit
- -$21,819.00
- Max Profit (per contract)
- $1,181.00
- Max Loss (per contract)
- -$819.00
- Breakeven(s)
- $218.19
- Risk / Reward Ratio
- 1.442
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.
PAYC collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on PAYC. 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% | -$819.00 |
| $48.22 | -77.9% | -$819.00 |
| $96.43 | -55.8% | -$819.00 |
| $144.64 | -33.7% | -$819.00 |
| $192.84 | -11.6% | -$819.00 |
| $241.05 | +10.6% | +$1,181.00 |
| $289.26 | +32.7% | +$1,181.00 |
| $337.47 | +54.8% | +$1,181.00 |
| $385.68 | +76.9% | +$1,181.00 |
| $433.89 | +99.0% | +$1,181.00 |
When traders use collar on PAYC
Collars on PAYC hedge an existing long PAYC 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.
PAYC thesis for this collar
The market-implied 1-standard-deviation range for PAYC extends from approximately $190.66 on the downside to $245.42 on the upside. A PAYC collar hedges an existing long PAYC 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 PAYC IV rank near 19.78% 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 PAYC at 43.80%. As a Technology name, PAYC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PAYC-specific events.
PAYC 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. PAYC positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PAYC alongside the broader basket even when PAYC-specific fundamentals are unchanged. Always rebuild the position from current PAYC chain quotes before placing a trade.
Frequently asked questions
- What is a collar on PAYC?
- A collar on PAYC is the collar strategy applied to PAYC (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 PAYC stock at $218.04 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed PAYC chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are PAYC 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 PAYC collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 43.80%), the computed maximum profit is $1,181.00 per contract and the computed maximum loss is -$819.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a PAYC collar?
- The breakeven for the PAYC collar priced on this page is roughly $218.19 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The PAYC market-implied 1-standard-deviation expected move in the same options snapshot is approximately 12.56%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on PAYC?
- Collars on PAYC hedge an existing long PAYC 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 PAYC implied volatility affect this collar?
- PAYC ATM IV is at 43.80% with IV rank near 19.78%, 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.