PECO Collar Strategy
PECO (Phillips Edison & Company, Inc.), in the Real Estate sector, (REIT - Retail industry), listed on NASDAQ.
Phillips Edison & Company, Inc. (PECO), an internally-managed REIT, is one of the nation's largest owners and operators of grocery-anchored shopping centers. PECO's diversified portfolio of well-occupied neighborhood shopping centers features a mix of national and regional retailers selling necessity-based goods and services in fundamentally strong markets throughout the United States. Through its vertically-integrated operating platform, the Company manages a portfolio of 309 properties, including 283 wholly-owned properties comprising approximately 31.7 million square feet across 31 states (as of September 30, 2020). PECO has generated strong operating results over its 29+ year history and has partnered with leading institutional commercial real estate investors, including TPG Real Estate and The Northwestern Mutual Life Insurance Company. The Company remains exclusively focused on creating great grocery-anchored shopping experiences and improving the communities it serves one center at a time.
PECO (Phillips Edison & Company, Inc.) trades in the Real Estate sector, specifically REIT - Retail, with a market capitalization of approximately $4.96B, a trailing P/E of 42.65, a beta of 0.57 versus the broader market, a 52-week range of 32.84-40.71, average daily share volume of 879K, a public-listing history dating back to 2021, approximately 300 full-time employees. These structural characteristics shape how PECO stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.57 indicates PECO has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. The trailing P/E of 42.65 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple. PECO pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on PECO?
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 PECO snapshot
As of May 15, 2026, spot at $39.23, ATM IV 9.60%, IV rank 0.00%, expected move 2.75%. The collar on PECO 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 PECO specifically: IV regime affects collar pricing on both sides; compressed PECO IV at 9.60% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 2.75% (roughly $1.08 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 PECO expiries trade a higher absolute premium for lower per-day decay. Position sizing on PECO should anchor to the underlying notional of $39.23 per share and to the trader's directional view on PECO stock.
PECO collar setup
The PECO 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 PECO near $39.23, the first option leg uses a $41.19 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PECO 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 PECO shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $39.23 | long |
| Sell 1 | Call | $41.19 | N/A |
| Buy 1 | Put | $37.27 | N/A |
PECO 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.
PECO collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on PECO. 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 PECO
Collars on PECO hedge an existing long PECO 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.
PECO thesis for this collar
The market-implied 1-standard-deviation range for PECO extends from approximately $38.15 on the downside to $40.31 on the upside. A PECO collar hedges an existing long PECO 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 PECO IV rank near 0.00% 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 PECO at 9.60%. As a Real Estate name, PECO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PECO-specific events.
PECO 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. PECO positions also carry Real Estate sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PECO alongside the broader basket even when PECO-specific fundamentals are unchanged. Always rebuild the position from current PECO chain quotes before placing a trade.
Frequently asked questions
- What is a collar on PECO?
- A collar on PECO is the collar strategy applied to PECO (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 PECO stock trading near $39.23, the strikes shown on this page are snapped to the nearest listed PECO chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are PECO 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 PECO collar priced from the end-of-day chain at a 30-day expiry (ATM IV 9.60%), 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 PECO collar?
- The breakeven for the PECO 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 PECO market-implied 1-standard-deviation expected move is approximately 2.75%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on PECO?
- Collars on PECO hedge an existing long PECO 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 PECO implied volatility affect this collar?
- PECO ATM IV is at 9.60% with IV rank near 0.00%, 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.