RGCO Collar Strategy
RGCO (RGC Resources, Inc.), in the Utilities sector, (Regulated Gas industry), listed on NASDAQ.
RGC Resources, Inc., through its subsidiaries, operates as an energy services company. It sells and distributes natural gas to residential, commercial, and industrial customers in Roanoke, Virginia, and the surrounding localities. The company also provides various unregulated services. It operates approximately 1,157 miles of transmission and distribution pipeline; and a liquefied natural gas storage facility, as well as owns and operates 6 metering stations. RGC Resources, Inc. was founded in 1883 and is based in Roanoke, Virginia.
RGCO (RGC Resources, Inc.) trades in the Utilities sector, specifically Regulated Gas, with a market capitalization of approximately $241.9M, a trailing P/E of 16.94, a beta of 0.51 versus the broader market, a 52-week range of 19.68-24.5, average daily share volume of 12K, a public-listing history dating back to 1994, approximately 104 full-time employees. These structural characteristics shape how RGCO stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.51 indicates RGCO has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. RGCO pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on RGCO?
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 RGCO snapshot
As of May 15, 2026, spot at $22.13, ATM IV 89.90%, IV rank 26.89%, expected move 25.77%. The collar on RGCO 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 RGCO specifically: IV regime affects collar pricing on both sides; compressed RGCO IV at 89.90% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 25.77% (roughly $5.70 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 RGCO expiries trade a higher absolute premium for lower per-day decay. Position sizing on RGCO should anchor to the underlying notional of $22.13 per share and to the trader's directional view on RGCO stock.
RGCO collar setup
The RGCO 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 RGCO near $22.13, the first option leg uses a $23.24 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RGCO 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 RGCO shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $22.13 | long |
| Sell 1 | Call | $23.24 | N/A |
| Buy 1 | Put | $21.02 | N/A |
RGCO 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.
RGCO collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on RGCO. 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 RGCO
Collars on RGCO hedge an existing long RGCO 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.
RGCO thesis for this collar
The market-implied 1-standard-deviation range for RGCO extends from approximately $16.43 on the downside to $27.83 on the upside. A RGCO collar hedges an existing long RGCO 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 RGCO IV rank near 26.89% 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 RGCO at 89.90%. As a Utilities name, RGCO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RGCO-specific events.
RGCO 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. RGCO positions also carry Utilities sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move RGCO alongside the broader basket even when RGCO-specific fundamentals are unchanged. Always rebuild the position from current RGCO chain quotes before placing a trade.
Frequently asked questions
- What is a collar on RGCO?
- A collar on RGCO is the collar strategy applied to RGCO (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 RGCO stock trading near $22.13, the strikes shown on this page are snapped to the nearest listed RGCO chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are RGCO 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 RGCO collar priced from the end-of-day chain at a 30-day expiry (ATM IV 89.90%), 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 RGCO collar?
- The breakeven for the RGCO 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 RGCO market-implied 1-standard-deviation expected move is approximately 25.77%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on RGCO?
- Collars on RGCO hedge an existing long RGCO 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 RGCO implied volatility affect this collar?
- RGCO ATM IV is at 89.90% with IV rank near 26.89%, 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.