How are RDW 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 RDW collar priced from the end-of-day chain at a 30-day expiry (ATM IV 120.79%), the computed maximum profit is $96.50 per contract and the computed maximum loss is -$53.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a RDW collar?

The breakeven for the RDW collar priced on this page is roughly $14.04 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 RDW market-implied 1-standard-deviation expected move is approximately 34.63%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current RDW implied volatility affect this collar?

RDW ATM IV is at 120.79% with IV rank near 83.56%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.

RDW Collar Strategy

RDW (Redwire Corporation), in the Industrials sector, (Aerospace & Defense industry), listed on NYSE.

Redwire Corporation, a space infrastructure company, develops, manufactures, and sells mission critical space solutions and components for national security, civil, and commercial space markets in the United States, Luxembourg, Germany, South Korea, Poland, and internationally. The company provides various antennas; and advanced sensors and components, which include solar arrays, composite booms, radio frequency antennas, payload adapters, space-qualifies camera systems, and star trackers and sun sensors. It also sells a proprietary enterprise software suite that enables digital engineering and generation of interactive modeling and simulations of individual components, entire spacecraft, and full constellations in a cloud-based Software as a Service business model. In addition, the company offers on-orbit servicing, assembly, and manufacturing solutions; and low-earth orbit commercialization, digitally engineered spacecraft, and space domain awareness and resiliency technology solutions. Redwire Corporation is headquartered in Jacksonville, Florida.

RDW (Redwire Corporation) trades in the Industrials sector, specifically Aerospace & Defense, with a market capitalization of approximately $1.72B, a beta of 2.42 versus the broader market, a 52-week range of 4.87-22.25, average daily share volume of 21.3M, a public-listing history dating back to 2021, approximately 750 full-time employees. These structural characteristics shape how RDW stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 2.42 indicates RDW has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.

What is a collar on RDW?

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 RDW snapshot

As of May 15, 2026, spot at $14.41, ATM IV 120.79%, IV rank 83.56%, expected move 34.63%. The collar on RDW 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 RDW specifically: IV regime affects collar pricing on both sides; elevated RDW IV at 120.79% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 34.63% (roughly $4.99 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 RDW expiries trade a higher absolute premium for lower per-day decay. Position sizing on RDW should anchor to the underlying notional of $14.41 per share and to the trader's directional view on RDW stock.

RDW collar setup

The RDW 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 RDW near $14.41, the first option leg uses a $15.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RDW 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 RDW shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$14.41	long
Sell 1	Call	$15.00	$1.73
Buy 1	Put	$13.50	$1.35

RDW collar risk and reward

Net Premium / Debit: -$1,403.50
Max Profit (per contract): $96.50
Max Loss (per contract): -$53.50
Breakeven(s): $14.04
Risk / Reward Ratio: 1.804

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.

RDW collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on RDW. 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	-99.9%	-$53.50
$3.20	-77.8%	-$53.50
$6.38	-55.7%	-$53.50
$9.57	-33.6%	-$53.50
$12.75	-11.5%	-$53.50
$15.94	+10.6%	+$96.50
$19.12	+32.7%	+$96.50
$22.31	+54.8%	+$96.50
$25.49	+76.9%	+$96.50
$28.68	+99.0%	+$96.50

When traders use collar on RDW

Collars on RDW hedge an existing long RDW 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.

RDW thesis for this collar

The market-implied 1-standard-deviation range for RDW extends from approximately $9.42 on the downside to $19.40 on the upside. A RDW collar hedges an existing long RDW 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 RDW IV rank near 83.56% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on RDW at 120.79%. As a Industrials name, RDW options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RDW-specific events.

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

Frequently asked questions

What is a collar on RDW?: A collar on RDW is the collar strategy applied to RDW (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 RDW stock trading near $14.41, the strikes shown on this page are snapped to the nearest listed RDW chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are RDW 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 RDW collar priced from the end-of-day chain at a 30-day expiry (ATM IV 120.79%), the computed maximum profit is $96.50 per contract and the computed maximum loss is -$53.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a RDW collar?: The breakeven for the RDW collar priced on this page is roughly $14.04 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 RDW market-implied 1-standard-deviation expected move is approximately 34.63%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on RDW?: Collars on RDW hedge an existing long RDW 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 RDW implied volatility affect this collar?: RDW ATM IV is at 120.79% with IV rank near 83.56%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.