PDS Collar Strategy
PDS (Precision Drilling Corporation), in the Energy sector, (Oil & Gas Drilling industry), listed on NYSE.
Precision Drilling Corporation, a drilling company, provides onshore drilling, completion, and production services to exploration and production companies in the oil and natural gas and geothermal industries in North America and the Middle East. The company operates in two segments, Contract Drilling Services; and Completion and Production Services. The Contract Drilling Services segment offers onshore well drilling services to exploration and production companies in the oil and natural gas industry. This segment's services include land and turnkey drilling; and procurement and distribution of oilfield supplies, as well as manufacture and refurbishment of drilling and service rig equipment. As of December 31, 2021, it operated 227 land drilling rigs, including 109 in Canada; 105 in the United States; 6 in Kuwait; 4 in Saudi Arabia; 2 in the Kurdistan region of Iraq; and 1 in the country of Georgia. As of December 31, 2021, this segment also operated 47 AlphaTM rigs with commercial AlphaAutomation; 18 AlphaApps; 4 grid power capable rigs; and 60 natural gas or bi-fuel rigs.
PDS (Precision Drilling Corporation) trades in the Energy sector, specifically Oil & Gas Drilling, with a market capitalization of approximately $1.20B, a beta of 1.37 versus the broader market, a 52-week range of 40.39-103.8, average daily share volume of 148K, a public-listing history dating back to 1996, approximately 6K full-time employees. These structural characteristics shape how PDS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.37 indicates PDS 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 PDS?
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 PDS snapshot
As of May 15, 2026, spot at $94.56, ATM IV 42.00%, IV rank 34.12%, expected move 12.04%. The collar on PDS 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 PDS specifically: IV regime affects collar pricing on both sides; mid-range PDS IV at 42.00% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 12.04% (roughly $11.39 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 PDS expiries trade a higher absolute premium for lower per-day decay. Position sizing on PDS should anchor to the underlying notional of $94.56 per share and to the trader's directional view on PDS stock.
PDS collar setup
The PDS 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 PDS near $94.56, the first option leg uses a $100.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PDS 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 PDS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $94.56 | long |
| Sell 1 | Call | $100.00 | $2.75 |
| Buy 1 | Put | $90.00 | $3.25 |
PDS collar risk and reward
- Net Premium / Debit
- -$9,506.00
- Max Profit (per contract)
- $494.00
- Max Loss (per contract)
- -$506.00
- Breakeven(s)
- $95.06
- Risk / Reward Ratio
- 0.976
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.
PDS collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on PDS. 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% | -$506.00 |
| $20.92 | -77.9% | -$506.00 |
| $41.82 | -55.8% | -$506.00 |
| $62.73 | -33.7% | -$506.00 |
| $83.64 | -11.6% | -$506.00 |
| $104.54 | +10.6% | +$494.00 |
| $125.45 | +32.7% | +$494.00 |
| $146.36 | +54.8% | +$494.00 |
| $167.26 | +76.9% | +$494.00 |
| $188.17 | +99.0% | +$494.00 |
When traders use collar on PDS
Collars on PDS hedge an existing long PDS 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.
PDS thesis for this collar
The market-implied 1-standard-deviation range for PDS extends from approximately $83.17 on the downside to $105.95 on the upside. A PDS collar hedges an existing long PDS 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 PDS IV rank near 34.12% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on PDS should anchor more to the directional view and the expected-move geometry. As a Energy name, PDS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PDS-specific events.
PDS 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. PDS positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PDS alongside the broader basket even when PDS-specific fundamentals are unchanged. Always rebuild the position from current PDS chain quotes before placing a trade.
Frequently asked questions
- What is a collar on PDS?
- A collar on PDS is the collar strategy applied to PDS (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 PDS stock trading near $94.56, the strikes shown on this page are snapped to the nearest listed PDS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are PDS 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 PDS collar priced from the end-of-day chain at a 30-day expiry (ATM IV 42.00%), the computed maximum profit is $494.00 per contract and the computed maximum loss is -$506.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a PDS collar?
- The breakeven for the PDS collar priced on this page is roughly $95.06 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 PDS market-implied 1-standard-deviation expected move is approximately 12.04%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on PDS?
- Collars on PDS hedge an existing long PDS 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 PDS implied volatility affect this collar?
- PDS ATM IV is at 42.00% with IV rank near 34.12%, 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.