PDM Collar Strategy
PDM (Piedmont Office Realty Trust, Inc.), in the Real Estate sector, (REIT - Office industry), listed on NYSE.
Piedmont Office Realty Trust, Inc. (NYSE: PDM) is an owner, manager, developer, redeveloper, and operator of high-quality, Class A office properties located primarily in select sub-markets within seven major Eastern U.S. office markets, with the majority of its revenue being generated from the Sunbelt. Its geographically-diversified, approximately $5 billion portfolio is currently comprised of approximately 17 million square feet. The Company is a fully-integrated, self-managed real estate investment trust (REIT) with local management offices in each of its markets and is investment-grade rated by S&P Global Ratings (BBB) and Moody's (Baa2). At the end of the third quarter, approximately 63% of the company's portfolio was ENERGY STAR certified and approximately 41% was LEED certified.
PDM (Piedmont Office Realty Trust, Inc.) trades in the Real Estate sector, specifically REIT - Office, with a market capitalization of approximately $1.01B, a beta of 1.39 versus the broader market, a 52-week range of 6.32-9.19, average daily share volume of 1.1M, a public-listing history dating back to 2010, approximately 150 full-time employees. These structural characteristics shape how PDM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.39 indicates PDM has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. PDM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on PDM?
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 PDM snapshot
As of May 15, 2026, spot at $7.80, ATM IV 24.30%, IV rank 0.45%, expected move 6.97%. The collar on PDM 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 PDM specifically: IV regime affects collar pricing on both sides; compressed PDM IV at 24.30% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 6.97% (roughly $0.54 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 PDM expiries trade a higher absolute premium for lower per-day decay. Position sizing on PDM should anchor to the underlying notional of $7.80 per share and to the trader's directional view on PDM stock.
PDM collar setup
The PDM 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 PDM near $7.80, the first option leg uses a $8.19 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PDM 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 PDM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $7.80 | long |
| Sell 1 | Call | $8.19 | N/A |
| Buy 1 | Put | $7.41 | N/A |
PDM 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.
PDM collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on PDM. 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 PDM
Collars on PDM hedge an existing long PDM 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.
PDM thesis for this collar
The market-implied 1-standard-deviation range for PDM extends from approximately $7.26 on the downside to $8.34 on the upside. A PDM collar hedges an existing long PDM 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 PDM IV rank near 0.45% 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 PDM at 24.30%. As a Real Estate name, PDM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PDM-specific events.
PDM 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. PDM positions also carry Real Estate sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PDM alongside the broader basket even when PDM-specific fundamentals are unchanged. Always rebuild the position from current PDM chain quotes before placing a trade.
Frequently asked questions
- What is a collar on PDM?
- A collar on PDM is the collar strategy applied to PDM (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 PDM stock trading near $7.80, the strikes shown on this page are snapped to the nearest listed PDM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are PDM 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 PDM collar priced from the end-of-day chain at a 30-day expiry (ATM IV 24.30%), 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 PDM collar?
- The breakeven for the PDM 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 PDM market-implied 1-standard-deviation expected move is approximately 6.97%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on PDM?
- Collars on PDM hedge an existing long PDM 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 PDM implied volatility affect this collar?
- PDM ATM IV is at 24.30% with IV rank near 0.45%, 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.