PSX Collar Strategy
PSX (Phillips 66), in the Energy sector, (Oil & Gas Refining & Marketing industry), listed on NYSE.
Phillips 66 operates as an energy manufacturing and logistics company. It operates through four segments: Midstream, Chemicals, Refining, and Marketing and Specialties (M&S). The Midstream segment transports crude oil and other feedstocks; delivers refined petroleum products to market; provides terminaling and storage services for crude oil and refined petroleum products; transports, stores, fractionates, exports, and markets natural gas liquids; provides other fee-based processing services; and gathers, processes, transports, and markets natural gas. The Chemicals segment produces and markets ethylene and other olefin products; aromatics and styrenics products, such as benzene, cyclohexane, styrene, and polystyrene; and various specialty chemical products, including organosulfur chemicals, solvents, catalysts, and chemicals used in drilling and mining. The Refining segment refines crude oil and other feedstocks into petroleum products, such as gasolines, distillates, aviation, and renewable fuels at 12 refineries in the United States and Europe. The M&S segment purchases for resale and markets refined petroleum products, including gasolines, distillates, and aviation fuels primarily in the United States and Europe.
PSX (Phillips 66) trades in the Energy sector, specifically Oil & Gas Refining & Marketing, with a market capitalization of approximately $68.89B, a trailing P/E of 16.75, a beta of 0.69 versus the broader market, a 52-week range of 109.75-190.61, average daily share volume of 3.2M, a public-listing history dating back to 2012, approximately 13K full-time employees. These structural characteristics shape how PSX stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.69 indicates PSX has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. PSX pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on PSX?
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 PSX snapshot
As of May 15, 2026, spot at $175.70, ATM IV 34.23%, IV rank 48.19%, expected move 9.81%. The collar on PSX 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 28-day expiry.
Why this collar structure on PSX specifically: IV regime affects collar pricing on both sides; mid-range PSX IV at 34.23% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 9.81% (roughly $17.24 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated PSX expiries trade a higher absolute premium for lower per-day decay. Position sizing on PSX should anchor to the underlying notional of $175.70 per share and to the trader's directional view on PSX stock.
PSX collar setup
The PSX 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 PSX near $175.70, the first option leg uses a $185.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PSX chain at a 28-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 PSX shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $175.70 | long |
| Sell 1 | Call | $185.00 | $2.80 |
| Buy 1 | Put | $165.00 | $2.95 |
PSX collar risk and reward
- Net Premium / Debit
- -$17,585.00
- Max Profit (per contract)
- $915.00
- Max Loss (per contract)
- -$1,085.00
- Breakeven(s)
- $175.85
- Risk / Reward Ratio
- 0.843
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.
PSX collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on PSX. 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% | -$1,085.00 |
| $38.86 | -77.9% | -$1,085.00 |
| $77.70 | -55.8% | -$1,085.00 |
| $116.55 | -33.7% | -$1,085.00 |
| $155.40 | -11.6% | -$1,085.00 |
| $194.25 | +10.6% | +$915.00 |
| $233.09 | +32.7% | +$915.00 |
| $271.94 | +54.8% | +$915.00 |
| $310.79 | +76.9% | +$915.00 |
| $349.63 | +99.0% | +$915.00 |
When traders use collar on PSX
Collars on PSX hedge an existing long PSX 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.
PSX thesis for this collar
The market-implied 1-standard-deviation range for PSX extends from approximately $158.46 on the downside to $192.94 on the upside. A PSX collar hedges an existing long PSX 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 PSX IV rank near 48.19% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on PSX should anchor more to the directional view and the expected-move geometry. As a Energy name, PSX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PSX-specific events.
PSX 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. PSX positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PSX alongside the broader basket even when PSX-specific fundamentals are unchanged. Always rebuild the position from current PSX chain quotes before placing a trade.
Frequently asked questions
- What is a collar on PSX?
- A collar on PSX is the collar strategy applied to PSX (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 PSX stock trading near $175.70, the strikes shown on this page are snapped to the nearest listed PSX chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are PSX 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 PSX collar priced from the end-of-day chain at a 30-day expiry (ATM IV 34.23%), the computed maximum profit is $915.00 per contract and the computed maximum loss is -$1,085.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a PSX collar?
- The breakeven for the PSX collar priced on this page is roughly $175.85 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 PSX market-implied 1-standard-deviation expected move is approximately 9.81%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on PSX?
- Collars on PSX hedge an existing long PSX 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 PSX implied volatility affect this collar?
- PSX ATM IV is at 34.23% with IV rank near 48.19%, 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.