RMD Collar Strategy
RMD (ResMed Inc.), in the Healthcare sector, (Medical - Instruments & Supplies industry), listed on NYSE.
ResMed Inc. develops, manufactures, distributes, and markets medical devices and cloud-based software applications for the healthcare markets. The company operates in two segments, Sleep and Respiratory Care, and Software as a Service. It offers various products and solutions for a range of respiratory disorders, including technologies to be applied in medical and consumer products, ventilation devices, diagnostic products, mask systems for use in the hospital and home, headgear and other accessories, dental devices, and cloud-based software informatics solutions to manage patient outcomes, as well as provides customer and business processes. The company also provides AirView, a cloud-based system that enables remote monitoring and changing of patients' device settings; myAir, a personalized therapy management application for patients with sleep apnea that provides support, education, and troubleshooting tools for increased patient engagement and improved compliance; U-Sleep, a compliance monitoring solution that enables home medical equipment (HME)to streamline their sleep programs; connectivity module and propeller solutions; and Propeller portal. It offers out-of-hospital software solution, such as Brightree business management software and service solutions to providers of HME, pharmacy, home infusion, orthotics, and prosthetics services; MatrixCare care management and related ancillary solutions to senior living, skilled nursing, life plan communities, home health, home care, and hospice organizations, as well as related accountable care organizations; and HEALTHCAREfirst that offers electronic health record, software, billing and coding services, and analytics for home health and hospice agencies. The company markets its products primarily to sleep clinics, home healthcare dealers, and hospitals through a network of distributors and direct sales force in approximately 140 countries.
RMD (ResMed Inc.) trades in the Healthcare sector, specifically Medical - Instruments & Supplies, with a market capitalization of approximately $29.36B, a trailing P/E of 19.51, a beta of 0.85 versus the broader market, a 52-week range of 198.61-293.81, average daily share volume of 1.1M, a public-listing history dating back to 1995, approximately 10K full-time employees. These structural characteristics shape how RMD stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.85 places RMD roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. RMD pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on RMD?
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 RMD snapshot
As of May 15, 2026, spot at $202.32, ATM IV 28.50%, IV rank 21.45%, expected move 8.17%. The collar on RMD 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 RMD specifically: IV regime affects collar pricing on both sides; compressed RMD IV at 28.50% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 8.17% (roughly $16.53 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 RMD expiries trade a higher absolute premium for lower per-day decay. Position sizing on RMD should anchor to the underlying notional of $202.32 per share and to the trader's directional view on RMD stock.
RMD collar setup
The RMD 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 RMD near $202.32, the first option leg uses a $210.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RMD 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 RMD shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $202.32 | long |
| Sell 1 | Call | $210.00 | $4.45 |
| Buy 1 | Put | $190.00 | $2.63 |
RMD collar risk and reward
- Net Premium / Debit
- -$20,049.50
- Max Profit (per contract)
- $950.50
- Max Loss (per contract)
- -$1,049.50
- Breakeven(s)
- $200.50
- Risk / Reward Ratio
- 0.906
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.
RMD collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on RMD. 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% | -$1,049.50 |
| $44.74 | -77.9% | -$1,049.50 |
| $89.48 | -55.8% | -$1,049.50 |
| $134.21 | -33.7% | -$1,049.50 |
| $178.94 | -11.6% | -$1,049.50 |
| $223.67 | +10.6% | +$950.50 |
| $268.41 | +32.7% | +$950.50 |
| $313.14 | +54.8% | +$950.50 |
| $357.87 | +76.9% | +$950.50 |
| $402.61 | +99.0% | +$950.50 |
When traders use collar on RMD
Collars on RMD hedge an existing long RMD 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.
RMD thesis for this collar
The market-implied 1-standard-deviation range for RMD extends from approximately $185.79 on the downside to $218.85 on the upside. A RMD collar hedges an existing long RMD 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 RMD IV rank near 21.45% 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 RMD at 28.50%. As a Healthcare name, RMD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RMD-specific events.
RMD 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. RMD positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move RMD alongside the broader basket even when RMD-specific fundamentals are unchanged. Always rebuild the position from current RMD chain quotes before placing a trade.
Frequently asked questions
- What is a collar on RMD?
- A collar on RMD is the collar strategy applied to RMD (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 RMD stock trading near $202.32, the strikes shown on this page are snapped to the nearest listed RMD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are RMD 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 RMD collar priced from the end-of-day chain at a 30-day expiry (ATM IV 28.50%), the computed maximum profit is $950.50 per contract and the computed maximum loss is -$1,049.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a RMD collar?
- The breakeven for the RMD collar priced on this page is roughly $200.50 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 RMD market-implied 1-standard-deviation expected move is approximately 8.17%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on RMD?
- Collars on RMD hedge an existing long RMD 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 RMD implied volatility affect this collar?
- RMD ATM IV is at 28.50% with IV rank near 21.45%, 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.