POWI Collar Strategy
POWI (Power Integrations, Inc.), in the Technology sector, (Semiconductors industry), listed on NASDAQ.
Power Integrations, Inc. is a global leader in the development, manufacturing, and sale of analog and mixed-signal integrated circuits (ICs), alongside other essential electronic components and circuitry. Their primary expertise lies in delivering solutions for high-voltage power conversion worldwide. The company offers a comprehensive portfolio of alternating current to direct current (AC-DC) power conversion products. These solutions cover a broad power range, from outputs of less than one watt up to approximately 500 watts. They are integral to numerous applications such as mobile device chargers, various consumer appliances (including utility meters, LCD monitors, and power supplies for desktop computers and televisions), and LED lighting. Furthermore, Power Integrations also provides specialized high-power conversion technologies for demanding industrial applications like industrial motors, solar and wind energy systems, electric vehicles, and high-voltage DC transmission systems.
POWI (Power Integrations, Inc.) trades in the Technology sector, specifically Semiconductors, with a market capitalization of approximately $3.50B, a trailing P/E of 136.75, a beta of 1.56 versus the broader market, a 52-week range of 30.86-91.18, average daily share volume of 1.1M, a public-listing history dating back to 1997, approximately 877 full-time employees. These structural characteristics shape how POWI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.56 indicates POWI 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 136.75 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. POWI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on POWI?
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.
POWI snapshot
As of August 14, 2026, spot at $62.57, ATM IV 60.60%, IV rank 11.61%, expected move 17.37%. The collar on POWI below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 63-day expiry.
Why this collar structure on POWI specifically: IV regime affects collar pricing on both sides; compressed POWI IV at 60.60% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 17.37% (roughly $10.87 on the underlying). The 63-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated POWI expiries trade a higher absolute premium for lower per-day decay. Position sizing on POWI should anchor to the underlying notional of $62.57 per share and to the trader's directional view on POWI stock.
POWI collar setup
The POWI collar below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With POWI at $62.57 on that close, the first option leg uses a $65.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed POWI chain at a 63-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 POWI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $62.57 | long |
| Sell 1 | Call | $65.00 | $5.60 |
| Buy 1 | Put | $60.00 | $5.50 |
POWI collar risk and reward
- Net Premium / Debit
- -$6,247.00
- Max Profit (per contract)
- $253.00
- Max Loss (per contract)
- -$247.00
- Breakeven(s)
- $62.47
- Risk / Reward Ratio
- 1.024
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.
POWI collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on POWI. 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% | -$247.00 |
| $13.84 | -77.9% | -$247.00 |
| $27.68 | -55.8% | -$247.00 |
| $41.51 | -33.7% | -$247.00 |
| $55.34 | -11.5% | -$247.00 |
| $69.18 | +10.6% | +$253.00 |
| $83.01 | +32.7% | +$253.00 |
| $96.84 | +54.8% | +$253.00 |
| $110.68 | +76.9% | +$253.00 |
| $124.51 | +99.0% | +$253.00 |
When traders use collar on POWI
Collars on POWI hedge an existing long POWI 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.
POWI thesis for this collar
The market-implied 1-standard-deviation range for POWI extends from approximately $51.70 on the downside to $73.44 on the upside. A POWI collar hedges an existing long POWI 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 POWI IV rank near 11.61% 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 POWI at 60.60%. As a Technology name, POWI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to POWI-specific events.
POWI 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. POWI positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move POWI alongside the broader basket even when POWI-specific fundamentals are unchanged. Always rebuild the position from current POWI chain quotes before placing a trade.
Frequently asked questions
- What is a collar on POWI?
- A collar on POWI is the collar strategy applied to POWI (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 POWI stock at $62.57 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed POWI chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are POWI 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 POWI collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 60.60%), the computed maximum profit is $253.00 per contract and the computed maximum loss is -$247.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a POWI collar?
- The breakeven for the POWI collar priced on this page is roughly $62.47 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The POWI market-implied 1-standard-deviation expected move in the same options snapshot is approximately 17.37%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on POWI?
- Collars on POWI hedge an existing long POWI 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 POWI implied volatility affect this collar?
- POWI ATM IV is at 60.60% with IV rank near 11.61%, 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.