RDVT Collar Strategy
RDVT (Red Violet, Inc.), in the Technology sector, (Software - Application industry), listed on NASDAQ.
Red Violet, Inc., a software and services company, specializes in proprietary technologies and applying analytical capabilities to deliver identity intelligence in the United States. It offers idiCORE, an investigative solution used to address various organizational challenges, which include due diligence, risk mitigation, identity authentication, and regulatory compliance; and FOREWARN, an app-based solution that provides instant knowledge before face-to-face engagement with a consumer, as well as helps professionals to identify and mitigate risk. The company serves financial services, insurance, healthcare, retail, and telecommunication companies; law enforcement and government agencies; and collections, corporate security, and investigative firms, as well as solutions used for purposes, such as risk mitigation, due diligence, fraud detection and prevention, regulatory compliance, and customer acquisition. It markets its products and services through value-added distributors, resellers, and strategic partners; and trade shows and seminars, advertising, public relations, distribution of sales literature, and product specifications and ongoing communication with prospective customers, distributors, resellers, strategic partners, and installed base of current customers, as well as through direct sales. Red Violet, Inc. was incorporated in 2017 and is headquartered in Boca Raton, Florida.
RDVT (Red Violet, Inc.) trades in the Technology sector, specifically Software - Application, with a market capitalization of approximately $644.6M, a trailing P/E of 45.99, a beta of 1.71 versus the broader market, a 52-week range of 33.4-64.135, average daily share volume of 124K, a public-listing history dating back to 2018, approximately 215 full-time employees. These structural characteristics shape how RDVT stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.71 indicates RDVT 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 45.99 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. RDVT pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on RDVT?
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 RDVT snapshot
As of May 15, 2026, spot at $46.66, ATM IV 57.30%, IV rank 6.83%, expected move 16.43%. The collar on RDVT 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 RDVT specifically: IV regime affects collar pricing on both sides; compressed RDVT IV at 57.30% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 16.43% (roughly $7.67 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 RDVT expiries trade a higher absolute premium for lower per-day decay. Position sizing on RDVT should anchor to the underlying notional of $46.66 per share and to the trader's directional view on RDVT stock.
RDVT collar setup
The RDVT 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 RDVT near $46.66, the first option leg uses a $48.99 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RDVT 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 RDVT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $46.66 | long |
| Sell 1 | Call | $48.99 | N/A |
| Buy 1 | Put | $44.33 | N/A |
RDVT 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.
RDVT collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on RDVT. 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 RDVT
Collars on RDVT hedge an existing long RDVT 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.
RDVT thesis for this collar
The market-implied 1-standard-deviation range for RDVT extends from approximately $38.99 on the downside to $54.33 on the upside. A RDVT collar hedges an existing long RDVT 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 RDVT IV rank near 6.83% 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 RDVT at 57.30%. As a Technology name, RDVT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RDVT-specific events.
RDVT 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. RDVT positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move RDVT alongside the broader basket even when RDVT-specific fundamentals are unchanged. Always rebuild the position from current RDVT chain quotes before placing a trade.
Frequently asked questions
- What is a collar on RDVT?
- A collar on RDVT is the collar strategy applied to RDVT (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 RDVT stock trading near $46.66, the strikes shown on this page are snapped to the nearest listed RDVT chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are RDVT 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 RDVT collar priced from the end-of-day chain at a 30-day expiry (ATM IV 57.30%), 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 RDVT collar?
- The breakeven for the RDVT 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 RDVT market-implied 1-standard-deviation expected move is approximately 16.43%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on RDVT?
- Collars on RDVT hedge an existing long RDVT 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 RDVT implied volatility affect this collar?
- RDVT ATM IV is at 57.30% with IV rank near 6.83%, 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.