SMMT Collar Strategy
SMMT (Summit Therapeutics Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Summit Therapeutics Inc., a biopharmaceutical company, discovers, develops, and commercializes medicines to treat infectious diseases in the United States and Latin America. It conducts clinical programs focusing on Clostridioides difficile infection (CDI). The company's lead product candidate is ridinilazole, an orally administered small molecule antibiotic that is in Phase III clinical trials for the treatment of CDI. It also offers SMT-738, for combating multidrug resistant infections primarily carbapenem-resistant Enterobacteriaceae infections; and DDS-04 series for the potential treatment of infections caused by the Enterobacteriaceae. The company was founded in 2003 and is based in Cambridge, Massachusetts.
SMMT (Summit Therapeutics Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $14.57B, a beta of -1.26 versus the broader market, a 52-week range of 13.83-30.98, average daily share volume of 3.4M, a public-listing history dating back to 2015, approximately 159 full-time employees. These structural characteristics shape how SMMT stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of -1.26 indicates SMMT 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 SMMT?
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 SMMT snapshot
As of May 15, 2026, spot at $16.87, ATM IV 155.30%, IV rank 92.31%, expected move 44.52%. The collar on SMMT 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 28-day expiry.
Why this collar structure on SMMT specifically: IV regime affects collar pricing on both sides; elevated SMMT IV at 155.30% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 44.52% (roughly $7.51 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated SMMT expiries trade a higher absolute premium for lower per-day decay. Position sizing on SMMT should anchor to the underlying notional of $16.87 per share and to the trader's directional view on SMMT stock.
SMMT collar setup
The SMMT 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 SMMT near $16.87, the first option leg uses a $18.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SMMT chain at a 28-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 SMMT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $16.87 | long |
| Sell 1 | Call | $18.00 | $2.30 |
| Buy 1 | Put | $16.00 | $2.28 |
SMMT collar risk and reward
- Net Premium / Debit
- -$1,684.50
- Max Profit (per contract)
- $115.50
- Max Loss (per contract)
- -$84.50
- Breakeven(s)
- $16.85
- Risk / Reward Ratio
- 1.367
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.
SMMT collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on SMMT. 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 | -99.9% | -$84.50 |
| $3.74 | -77.8% | -$84.50 |
| $7.47 | -55.7% | -$84.50 |
| $11.20 | -33.6% | -$84.50 |
| $14.93 | -11.5% | -$84.50 |
| $18.65 | +10.6% | +$115.50 |
| $22.38 | +32.7% | +$115.50 |
| $26.11 | +54.8% | +$115.50 |
| $29.84 | +76.9% | +$115.50 |
| $33.57 | +99.0% | +$115.50 |
When traders use collar on SMMT
Collars on SMMT hedge an existing long SMMT 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.
SMMT thesis for this collar
The market-implied 1-standard-deviation range for SMMT extends from approximately $9.36 on the downside to $24.38 on the upside. A SMMT collar hedges an existing long SMMT 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 SMMT IV rank near 92.31% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on SMMT at 155.30%. As a Healthcare name, SMMT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SMMT-specific events.
SMMT 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. SMMT positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move SMMT alongside the broader basket even when SMMT-specific fundamentals are unchanged. Always rebuild the position from current SMMT chain quotes before placing a trade.
Frequently asked questions
- What is a collar on SMMT?
- A collar on SMMT is the collar strategy applied to SMMT (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 SMMT stock trading near $16.87, the strikes shown on this page are snapped to the nearest listed SMMT chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are SMMT 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 SMMT collar priced from the end-of-day chain at a 30-day expiry (ATM IV 155.30%), the computed maximum profit is $115.50 per contract and the computed maximum loss is -$84.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a SMMT collar?
- The breakeven for the SMMT collar priced on this page is roughly $16.85 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 SMMT market-implied 1-standard-deviation expected move is approximately 44.52%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on SMMT?
- Collars on SMMT hedge an existing long SMMT 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 SMMT implied volatility affect this collar?
- SMMT ATM IV is at 155.30% with IV rank near 92.31%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.