ROK Collar Strategy
ROK (Rockwell Automation, Inc.), in the Industrials sector, (Industrial - Machinery industry), listed on NYSE.
Rockwell Automation, Inc., established in 1903 and headquartered in Milwaukee, Wisconsin, is a global leader in providing industrial automation and digital transformation solutions. The company's operations are segmented into three key areas: Intelligent Devices, Software & Control, and Lifecycle Services. The Intelligent Devices segment offers various hardware products such as drives, motion control systems, safety and sensing equipment, industrial components, and customized configurations. The Software & Control division provides essential control and visualization software and accompanying hardware, information management platforms, digital twin and simulation tools, and network and cybersecurity infrastructure. The Lifecycle Services segment completes its offering with expert consulting, professional implementation, and ongoing connected and maintenance support. Rockwell Automation distributes its comprehensive array of hardware, software, and services worldwide through a network of independent distributors, complemented by its direct sales force.
ROK (Rockwell Automation, Inc.) trades in the Industrials sector, specifically Industrial - Machinery, with a market capitalization of approximately $50.23B, a trailing P/E of 42.13, a beta of 1.54 versus the broader market, a 52-week range of 332.71-497.36, average daily share volume of 814K, a public-listing history dating back to 1981, approximately 26K full-time employees. These structural characteristics shape how ROK stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.54 indicates ROK 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 42.13 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. ROK pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on ROK?
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.
ROK snapshot
As of August 14, 2026, spot at $449.24, ATM IV 29.00%, IV rank 22.74%, expected move 8.31%. The collar on ROK below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this collar structure on ROK specifically: IV regime affects collar pricing on both sides; compressed ROK IV at 29.00% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 8.31% (roughly $37.35 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated ROK expiries trade a higher absolute premium for lower per-day decay. Position sizing on ROK should anchor to the underlying notional of $449.24 per share and to the trader's directional view on ROK stock.
ROK collar setup
The ROK collar below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With ROK at $449.24 on that close, the first option leg uses a $470.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ROK chain at a 35-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 ROK shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $449.24 | long |
| Sell 1 | Call | $470.00 | $7.65 |
| Buy 1 | Put | $430.00 | $8.65 |
ROK collar risk and reward
- Net Premium / Debit
- -$45,024.00
- Max Profit (per contract)
- $1,976.00
- Max Loss (per contract)
- -$2,024.00
- Breakeven(s)
- $450.24
- Risk / Reward Ratio
- 0.976
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.
ROK collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on ROK. 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% | -$2,024.00 |
| $99.34 | -77.9% | -$2,024.00 |
| $198.67 | -55.8% | -$2,024.00 |
| $298.00 | -33.7% | -$2,024.00 |
| $397.32 | -11.6% | -$2,024.00 |
| $496.65 | +10.6% | +$1,976.00 |
| $595.98 | +32.7% | +$1,976.00 |
| $695.31 | +54.8% | +$1,976.00 |
| $794.64 | +76.9% | +$1,976.00 |
| $893.97 | +99.0% | +$1,976.00 |
When traders use collar on ROK
Collars on ROK hedge an existing long ROK 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.
ROK thesis for this collar
The market-implied 1-standard-deviation range for ROK extends from approximately $411.89 on the downside to $486.59 on the upside. A ROK collar hedges an existing long ROK 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 ROK IV rank near 22.74% 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 ROK at 29.00%. As a Industrials name, ROK options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ROK-specific events.
ROK 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. ROK positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ROK alongside the broader basket even when ROK-specific fundamentals are unchanged. Always rebuild the position from current ROK chain quotes before placing a trade.
Frequently asked questions
- What is a collar on ROK?
- A collar on ROK is the collar strategy applied to ROK (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 ROK stock at $449.24 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed ROK chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are ROK 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 ROK collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 29.00%), the computed maximum profit is $1,976.00 per contract and the computed maximum loss is -$2,024.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a ROK collar?
- The breakeven for the ROK collar priced on this page is roughly $450.24 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The ROK market-implied 1-standard-deviation expected move in the same options snapshot is approximately 8.31%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on ROK?
- Collars on ROK hedge an existing long ROK 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 ROK implied volatility affect this collar?
- ROK ATM IV is at 29.00% with IV rank near 22.74%, 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.