SMG Collar Strategy
SMG (The Scotts Miracle-Gro Company), in the Basic Materials sector, (Agricultural Inputs industry), listed on NYSE.
The Scotts Miracle-Gro Company engages in the manufacture, marketing, and sale of products for lawn, garden care, and indoor and hydroponic gardening in the United States and internationally. The company operates through three segments: U.S. Consumer, Hawthorne, and Other. It provides lawn care products comprising lawn fertilizers, grass seed products, spreaders, other durable products, and outdoor cleaners, as well as lawn-related weed, pest, and disease control products; gardening and landscape products include water-soluble and continuous-release plant foods, potting mixes and garden soils, mulch and decorative groundcover products, plant-related pest and disease control products, organic garden products, and lives goods and seeding solutions. The company also offers hydroponic products that help users to grow plants, flowers, and vegetables using little or no soil; lighting systems and components for use in hydroponic and indoor gardening applications; insect, rodent, and weed control products for home areas; and non-selective weed killer products. It sells its products under the Scotts, Turf Builder, EZ Seed, PatchMaster, Thick'R Lawn, GrubEx, EdgeGuard, Handy Green II, Miracle-Gro, LiquaFeed, Osmocote, Shake 'N Feed, Hyponex, Earthgro, SuperSoil, Fafard, Nature Scapes, Ortho, Miracle-Gro Performance Organics, Miracle-Gro Organic Choice, Whitney Farms, EcoScraps, Mother Earth, Botanicare, Hydroponics, Vermicrop, Gavita, Agrolux, Can-Filters, Sun System, Gro Pro, Hurricane, AeroGarden, Titan, Tomcat, Ortho Weed B Gon, Roundup, Groundclear, and Alchemist brands.
SMG (The Scotts Miracle-Gro Company) trades in the Basic Materials sector, specifically Agricultural Inputs, with a market capitalization of approximately $3.42B, a trailing P/E of 30.81, a beta of 1.86 versus the broader market, a 52-week range of 52-72.35, average daily share volume of 972K, a public-listing history dating back to 1992, approximately 5K full-time employees. These structural characteristics shape how SMG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.86 indicates SMG has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. SMG pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on SMG?
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 SMG snapshot
As of May 15, 2026, spot at $56.75, ATM IV 39.60%, IV rank 34.64%, expected move 11.35%. The collar on SMG 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 SMG specifically: IV regime affects collar pricing on both sides; mid-range SMG IV at 39.60% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 11.35% (roughly $6.44 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 SMG expiries trade a higher absolute premium for lower per-day decay. Position sizing on SMG should anchor to the underlying notional of $56.75 per share and to the trader's directional view on SMG stock.
SMG collar setup
The SMG 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 SMG near $56.75, the first option leg uses a $60.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SMG 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 SMG shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $56.75 | long |
| Sell 1 | Call | $60.00 | $1.35 |
| Buy 1 | Put | $55.00 | $2.18 |
SMG collar risk and reward
- Net Premium / Debit
- -$5,757.50
- Max Profit (per contract)
- $242.50
- Max Loss (per contract)
- -$257.50
- Breakeven(s)
- $57.58
- Risk / Reward Ratio
- 0.942
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.
SMG collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on SMG. 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% | -$257.50 |
| $12.56 | -77.9% | -$257.50 |
| $25.10 | -55.8% | -$257.50 |
| $37.65 | -33.7% | -$257.50 |
| $50.20 | -11.5% | -$257.50 |
| $62.74 | +10.6% | +$242.50 |
| $75.29 | +32.7% | +$242.50 |
| $87.84 | +54.8% | +$242.50 |
| $100.38 | +76.9% | +$242.50 |
| $112.93 | +99.0% | +$242.50 |
When traders use collar on SMG
Collars on SMG hedge an existing long SMG 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.
SMG thesis for this collar
The market-implied 1-standard-deviation range for SMG extends from approximately $50.31 on the downside to $63.19 on the upside. A SMG collar hedges an existing long SMG 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 SMG IV rank near 34.64% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on SMG should anchor more to the directional view and the expected-move geometry. As a Basic Materials name, SMG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SMG-specific events.
SMG 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. SMG positions also carry Basic Materials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move SMG alongside the broader basket even when SMG-specific fundamentals are unchanged. Always rebuild the position from current SMG chain quotes before placing a trade.
Frequently asked questions
- What is a collar on SMG?
- A collar on SMG is the collar strategy applied to SMG (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 SMG stock trading near $56.75, the strikes shown on this page are snapped to the nearest listed SMG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are SMG 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 SMG collar priced from the end-of-day chain at a 30-day expiry (ATM IV 39.60%), the computed maximum profit is $242.50 per contract and the computed maximum loss is -$257.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a SMG collar?
- The breakeven for the SMG collar priced on this page is roughly $57.58 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 SMG market-implied 1-standard-deviation expected move is approximately 11.35%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on SMG?
- Collars on SMG hedge an existing long SMG 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 SMG implied volatility affect this collar?
- SMG ATM IV is at 39.60% with IV rank near 34.64%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.