How are SGML 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 SGML collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 92.40%), the computed maximum profit is $109.00 per contract and the computed maximum loss is -$91.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a SGML collar?

The breakeven for the SGML collar priced on this page is roughly $11.91 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 SGML market-implied 1-standard-deviation expected move in the same options snapshot is approximately 26.49%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current SGML implied volatility affect this collar?

SGML ATM IV is at 92.40% with IV rank near 15.64%, 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.

SGML Collar Strategy

SGML (Sigma Lithium Corporation), in the Basic Materials sector, (Industrial Materials industry), listed on NASDAQ.

Sigma Lithium Corporation, with its corporate headquarters in São Paulo, Brazil, is dedicated to the exploration and development of lithium resources within the country. The company maintains a full 100% ownership stake in its key Brazilian properties: Grota do Cirilo, Genipapo, Santa Clara, and São José. These assets encompass a total of 27 distinct mineral rights, collectively spanning an area of approximately 191 square kilometers. They are strategically located within the Araçuaí and Itinga regions of Brazil's Minas Gerais state. The entity previously operated as Sigma Lithium Resources Corporation, adopting its current name in July 2021.

SGML (Sigma Lithium Corporation) trades in the Basic Materials sector, specifically Industrial Materials, with a market capitalization of approximately $1.32B, a beta of 0.57 versus the broader market, a 52-week range of 4.615-24.48, average daily share volume of 2.9M, a public-listing history dating back to 2018, approximately 560 full-time employees. These structural characteristics shape how SGML stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.57 indicates SGML has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure.

What is a collar on SGML?

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.

SGML snapshot

As of August 14, 2026, spot at $11.96, ATM IV 92.40%, IV rank 15.64%, expected move 26.49%. The collar on SGML 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 7-day expiry.

Why this collar structure on SGML specifically: IV regime affects collar pricing on both sides; compressed SGML IV at 92.40% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 26.49% (roughly $3.17 on the underlying). The 7-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated SGML expiries trade a higher absolute premium for lower per-day decay. Position sizing on SGML should anchor to the underlying notional of $11.96 per share and to the trader's directional view on SGML stock.

SGML collar setup

The SGML 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 SGML at $11.96 on that close, the first option leg uses a $13.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SGML chain at a 7-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 SGML shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$11.96	long
Sell 1	Call	$13.00	$0.30
Buy 1	Put	$11.00	$0.25

SGML collar risk and reward

Net Premium / Debit: -$1,191.00
Max Profit (per contract): $109.00
Max Loss (per contract): -$91.00
Breakeven(s): $11.91
Risk / Reward Ratio: 1.198

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.

SGML collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on SGML. 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.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-99.9%	-$91.00
$2.65	-77.8%	-$91.00
$5.30	-55.7%	-$91.00
$7.94	-33.6%	-$91.00
$10.58	-11.5%	-$91.00
$13.23	+10.6%	+$109.00
$15.87	+32.7%	+$109.00
$18.51	+54.8%	+$109.00
$21.16	+76.9%	+$109.00
$23.80	+99.0%	+$109.00

When traders use collar on SGML

Collars on SGML hedge an existing long SGML 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.

SGML thesis for this collar

The market-implied 1-standard-deviation range for SGML extends from approximately $8.79 on the downside to $15.13 on the upside. A SGML collar hedges an existing long SGML 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 SGML IV rank near 15.64% 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 SGML at 92.40%. As a Basic Materials name, SGML options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SGML-specific events.

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

Frequently asked questions

What is a collar on SGML?: A collar on SGML is the collar strategy applied to SGML (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 SGML stock at $11.96 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed SGML chain strike and the premiums come straight from that session's bid/ask midpoint.
How are SGML 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 SGML collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 92.40%), the computed maximum profit is $109.00 per contract and the computed maximum loss is -$91.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a SGML collar?: The breakeven for the SGML collar priced on this page is roughly $11.91 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 SGML market-implied 1-standard-deviation expected move in the same options snapshot is approximately 26.49%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on SGML?: Collars on SGML hedge an existing long SGML 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 SGML implied volatility affect this collar?: SGML ATM IV is at 92.40% with IV rank near 15.64%, 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.