How are PNW 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 PNW collar priced from the end-of-day chain at a 30-day expiry (ATM IV 19.90%), the computed maximum profit is $578.00 per contract and the computed maximum loss is -$422.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a PNW collar?

The breakeven for the PNW collar priced on this page is roughly $99.22 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 PNW market-implied 1-standard-deviation expected move is approximately 5.71%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current PNW implied volatility affect this collar?

PNW ATM IV is at 19.90% with IV rank near 47.04%, 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.

PNW Collar Strategy

PNW (Pinnacle West Capital Corporation), in the Utilities sector, (Regulated Electric industry), listed on NYSE.

Pinnacle West Capital Corporation, through its subsidiary, Arizona Public Service Company, provides retail and wholesale electric services primarily in the state of Arizona. The company engages in the generation, transmission, and distribution of electricity using coal, nuclear, gas, oil, and solar generating facilities. Its transmission facilities include approximately 5,814 pole miles of overhead lines and approximately 74 miles of underground lines; and distribution facilities comprise approximately 11,258 miles of overhead lines and approximately 22,821 miles of underground primary cable, as well as owns and maintains 475 transmission and distribution substations. The company also owns or leases approximately 6,323 megawatts of regulated generation capacity. It serves approximately 1.3 million customers. Pinnacle West Capital Corporation was incorporated in 1985 and is headquartered in Phoenix, Arizona.

PNW (Pinnacle West Capital Corporation) trades in the Utilities sector, specifically Regulated Electric, with a market capitalization of approximately $12.01B, a trailing P/E of 18.38, a beta of 0.46 versus the broader market, a 52-week range of 85.32-104.92, average daily share volume of 1.3M, a public-listing history dating back to 1961, approximately 94 full-time employees. These structural characteristics shape how PNW stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.46 indicates PNW has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. PNW pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a collar on PNW?

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 PNW snapshot

As of May 15, 2026, spot at $98.72, ATM IV 19.90%, IV rank 47.04%, expected move 5.71%. The collar on PNW 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 PNW specifically: IV regime affects collar pricing on both sides; mid-range PNW IV at 19.90% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 5.71% (roughly $5.63 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 PNW expiries trade a higher absolute premium for lower per-day decay. Position sizing on PNW should anchor to the underlying notional of $98.72 per share and to the trader's directional view on PNW stock.

PNW collar setup

The PNW 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 PNW near $98.72, the first option leg uses a $105.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PNW 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 PNW shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$98.72	long
Sell 1	Call	$105.00	$0.60
Buy 1	Put	$95.00	$1.10

PNW collar risk and reward

Net Premium / Debit: -$9,922.00
Max Profit (per contract): $578.00
Max Loss (per contract): -$422.00
Breakeven(s): $99.22
Risk / Reward Ratio: 1.370

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.

PNW collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on PNW. 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%	-$422.00
$21.84	-77.9%	-$422.00
$43.66	-55.8%	-$422.00
$65.49	-33.7%	-$422.00
$87.32	-11.6%	-$422.00
$109.14	+10.6%	+$578.00
$130.97	+32.7%	+$578.00
$152.80	+54.8%	+$578.00
$174.62	+76.9%	+$578.00
$196.45	+99.0%	+$578.00

When traders use collar on PNW

Collars on PNW hedge an existing long PNW 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.

PNW thesis for this collar

The market-implied 1-standard-deviation range for PNW extends from approximately $93.09 on the downside to $104.35 on the upside. A PNW collar hedges an existing long PNW 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 PNW IV rank near 47.04% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on PNW should anchor more to the directional view and the expected-move geometry. As a Utilities name, PNW options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PNW-specific events.

PNW 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. PNW positions also carry Utilities sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PNW alongside the broader basket even when PNW-specific fundamentals are unchanged. Always rebuild the position from current PNW chain quotes before placing a trade.

Frequently asked questions

What is a collar on PNW?: A collar on PNW is the collar strategy applied to PNW (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 PNW stock trading near $98.72, the strikes shown on this page are snapped to the nearest listed PNW chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are PNW 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 PNW collar priced from the end-of-day chain at a 30-day expiry (ATM IV 19.90%), the computed maximum profit is $578.00 per contract and the computed maximum loss is -$422.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a PNW collar?: The breakeven for the PNW collar priced on this page is roughly $99.22 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 PNW market-implied 1-standard-deviation expected move is approximately 5.71%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on PNW?: Collars on PNW hedge an existing long PNW 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 PNW implied volatility affect this collar?: PNW ATM IV is at 19.90% with IV rank near 47.04%, 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.