RPD Collar Strategy
RPD (Rapid7, Inc.), in the Technology sector, (Software - Infrastructure industry), listed on NASDAQ.
Rapid7, Inc. provides cyber security solutions. The company offers a cloud-native insight platform that enables customers to create and manage analytics-driven cyber security risk management programs. Its platform includes InsightIDR, an incident detection and response solution; InsightCloudSec, a solution that integrates posture management, workload protection, infrastructure entitlements management, infrastructure-as-code security, and Kubernetes protection; InsightVM, a vulnerability risk management solution that is designed to provide a way to collect vulnerability data, prioritize risk, and automate remediation; InsightAppSec, which provides application security testing that analyzes web applications for security vulnerabilities; and InsightConnect, a security orchestration and automation response solution that is used by security professionals. The company's other products include DivvyCloud, a cloud security posture management solution; Nexpose, an on-premises version of company's vulnerability risk management solution; AppSpider, an on-premises version of company's application security testing solution; and Metasploit, a penetration testing software solution, as well as professional services. It offers its products through term or perpetual software licenses, cloud-based subscriptions, and managed services. The company serves customers in a range of industries, including technology, energy, financial services, healthcare and life sciences, manufacturing, media and entertainment, retail, education, real estate, transportation, government, and professional services industries through sales teams, and indirect channel partner relationships, as well as directly in the Americas, Europe, the Middle East, Africa, and the Asia Pacific.
RPD (Rapid7, Inc.) trades in the Technology sector, specifically Software - Infrastructure, with a market capitalization of approximately $413.0M, a trailing P/E of 18.25, a beta of 0.89 versus the broader market, a 52-week range of 4.97-25.85, average daily share volume of 2.2M, a public-listing history dating back to 2015, approximately 2K full-time employees. These structural characteristics shape how RPD stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.89 places RPD roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a collar on RPD?
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 RPD snapshot
As of May 15, 2026, spot at $6.50, ATM IV 84.50%, IV rank 22.21%, expected move 24.23%. The collar on RPD 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 98-day expiry.
Why this collar structure on RPD specifically: IV regime affects collar pricing on both sides; compressed RPD IV at 84.50% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 24.23% (roughly $1.57 on the underlying). The 98-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated RPD expiries trade a higher absolute premium for lower per-day decay. Position sizing on RPD should anchor to the underlying notional of $6.50 per share and to the trader's directional view on RPD stock.
RPD collar setup
The RPD 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 RPD near $6.50, the first option leg uses a $7.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RPD chain at a 98-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 RPD shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $6.50 | long |
| Sell 1 | Call | $7.00 | $0.95 |
| Buy 1 | Put | $6.00 | $0.85 |
RPD collar risk and reward
- Net Premium / Debit
- -$640.00
- Max Profit (per contract)
- $60.00
- Max Loss (per contract)
- -$40.00
- Breakeven(s)
- $6.40
- Risk / Reward Ratio
- 1.500
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.
RPD collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on RPD. 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 | -99.8% | -$40.00 |
| $1.45 | -77.8% | -$40.00 |
| $2.88 | -55.7% | -$40.00 |
| $4.32 | -33.6% | -$40.00 |
| $5.75 | -11.5% | -$40.00 |
| $7.19 | +10.6% | +$60.00 |
| $8.63 | +32.7% | +$60.00 |
| $10.06 | +54.8% | +$60.00 |
| $11.50 | +76.9% | +$60.00 |
| $12.93 | +99.0% | +$60.00 |
When traders use collar on RPD
Collars on RPD hedge an existing long RPD 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.
RPD thesis for this collar
The market-implied 1-standard-deviation range for RPD extends from approximately $4.93 on the downside to $8.07 on the upside. A RPD collar hedges an existing long RPD 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 RPD IV rank near 22.21% 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 RPD at 84.50%. As a Technology name, RPD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RPD-specific events.
RPD 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. RPD positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move RPD alongside the broader basket even when RPD-specific fundamentals are unchanged. Always rebuild the position from current RPD chain quotes before placing a trade.
Frequently asked questions
- What is a collar on RPD?
- A collar on RPD is the collar strategy applied to RPD (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 RPD stock trading near $6.50, the strikes shown on this page are snapped to the nearest listed RPD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are RPD 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 RPD collar priced from the end-of-day chain at a 30-day expiry (ATM IV 84.50%), the computed maximum profit is $60.00 per contract and the computed maximum loss is -$40.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a RPD collar?
- The breakeven for the RPD collar priced on this page is roughly $6.40 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 RPD market-implied 1-standard-deviation expected move is approximately 24.23%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on RPD?
- Collars on RPD hedge an existing long RPD 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 RPD implied volatility affect this collar?
- RPD ATM IV is at 84.50% with IV rank near 22.21%, 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.