PFSI Collar Strategy
PFSI (PennyMac Financial Services, Inc.), in the Financial Services sector, (Financial - Mortgages industry), listed on NYSE.
PennyMac Financial Services, Inc., through its subsidiaries, engages in the mortgage banking and investment management activities in the United States. It operates through three segments: Production, Servicing, and Investment Management. The Production segment is involved in the origination, acquisition, and sale of loans. It sources first-lien residential conventional and government-insured or guaranteed mortgage loans. The Servicing segment engages in the servicing of newly originated loans, and execution and management of early buyout transactions and servicing of loans. It performs loan administration, collection, and default management activities, including the collection and remittance of loan payments, response to customer inquiries, accounting for principal and interest, holding custodial funds for the payment of property taxes and insurance premiums, counseling delinquent borrowers, and supervising foreclosures and property dispositions, as well as administers loss mitigation activities, such as modification and forbearance programs.
PFSI (PennyMac Financial Services, Inc.) trades in the Financial Services sector, specifically Financial - Mortgages, with a market capitalization of approximately $4.56B, a trailing P/E of 9.02, a beta of 1.49 versus the broader market, a 52-week range of 82.65-160.36, average daily share volume of 668K, a public-listing history dating back to 2013, approximately 4K full-time employees. These structural characteristics shape how PFSI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.49 indicates PFSI has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. The trailing P/E of 9.02 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. PFSI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on PFSI?
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 PFSI snapshot
As of May 15, 2026, spot at $85.91, ATM IV 33.00%, IV rank 32.23%, expected move 9.46%. The collar on PFSI 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 98-day expiry.
Why this collar structure on PFSI specifically: IV regime affects collar pricing on both sides; mid-range PFSI IV at 33.00% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 9.46% (roughly $8.13 on the underlying). The 98-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated PFSI expiries trade a higher absolute premium for lower per-day decay. Position sizing on PFSI should anchor to the underlying notional of $85.91 per share and to the trader's directional view on PFSI stock.
PFSI collar setup
The PFSI 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 PFSI near $85.91, the first option leg uses a $90.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PFSI chain at a 98-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 PFSI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $85.91 | long |
| Sell 1 | Call | $90.00 | $4.25 |
| Buy 1 | Put | $80.00 | $3.45 |
PFSI collar risk and reward
- Net Premium / Debit
- -$8,511.00
- Max Profit (per contract)
- $489.00
- Max Loss (per contract)
- -$511.00
- Breakeven(s)
- $85.11
- Risk / Reward Ratio
- 0.957
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.
PFSI collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on PFSI. 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% | -$511.00 |
| $19.00 | -77.9% | -$511.00 |
| $38.00 | -55.8% | -$511.00 |
| $56.99 | -33.7% | -$511.00 |
| $75.99 | -11.6% | -$511.00 |
| $94.98 | +10.6% | +$489.00 |
| $113.97 | +32.7% | +$489.00 |
| $132.97 | +54.8% | +$489.00 |
| $151.96 | +76.9% | +$489.00 |
| $170.96 | +99.0% | +$489.00 |
When traders use collar on PFSI
Collars on PFSI hedge an existing long PFSI 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.
PFSI thesis for this collar
The market-implied 1-standard-deviation range for PFSI extends from approximately $77.78 on the downside to $94.04 on the upside. A PFSI collar hedges an existing long PFSI 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 PFSI IV rank near 32.23% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on PFSI should anchor more to the directional view and the expected-move geometry. As a Financial Services name, PFSI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PFSI-specific events.
PFSI 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. PFSI positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PFSI alongside the broader basket even when PFSI-specific fundamentals are unchanged. Always rebuild the position from current PFSI chain quotes before placing a trade.
Frequently asked questions
- What is a collar on PFSI?
- A collar on PFSI is the collar strategy applied to PFSI (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 PFSI stock trading near $85.91, the strikes shown on this page are snapped to the nearest listed PFSI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are PFSI 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 PFSI collar priced from the end-of-day chain at a 30-day expiry (ATM IV 33.00%), the computed maximum profit is $489.00 per contract and the computed maximum loss is -$511.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a PFSI collar?
- The breakeven for the PFSI collar priced on this page is roughly $85.11 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 PFSI market-implied 1-standard-deviation expected move is approximately 9.46%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on PFSI?
- Collars on PFSI hedge an existing long PFSI 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 PFSI implied volatility affect this collar?
- PFSI ATM IV is at 33.00% with IV rank near 32.23%, 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.