SRCE Collar Strategy
SRCE (1st Source Corporation), in the Financial Services sector, (Banks - Regional industry), listed on NASDAQ.
1st Source Corporation operates as the bank holding company for 1st Source Bank that provides commercial and consumer banking services, trust and wealth advisory services, and insurance products to individual and business clients. Its consumer banking services include checking and savings accounts; certificates of deposit; individual retirement accounts; online and mobile banking products; consumer loans, real estate mortgage loans, and home equity lines of credit; and financial planning, financial literacy, and other consultative services, as well as debit and credit cards. The company also offers commercial, small business, agricultural, and real estate loans for general corporate purposes, including financing for industrial and commercial properties, equipment, inventories, accounts receivables, and renewable energy and acquisition financing; and commercial leasing, treasury management, and retirement planning services. In addition, it provides trust, investment, agency, and custodial services comprising administration of estates and personal trusts, as well as management of investment accounts for individuals, employee benefit plans, and charitable foundations. Further, the company offers equipment loan and lease products for construction equipment, new and pre-owned aircraft, auto and light trucks, and medium and heavy duty trucks; and finances construction equipment, aircrafts, medium and heavy duty trucks, step vans, vocational work trucks, motor coaches, shuttle buses, funeral cars, automobiles, and other equipment. Additionally, it provides corporate and personal property, casualty, and individual and group health and life insurance products and services.
SRCE (1st Source Corporation) trades in the Financial Services sector, specifically Banks - Regional, with a market capitalization of approximately $1.72B, a trailing P/E of 10.81, a beta of 0.59 versus the broader market, a 52-week range of 56.89-76.44, average daily share volume of 145K, a public-listing history dating back to 1983, approximately 1K full-time employees. These structural characteristics shape how SRCE stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.59 indicates SRCE has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. The trailing P/E of 10.81 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. SRCE pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on SRCE?
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 SRCE snapshot
As of May 15, 2026, spot at $71.22, ATM IV 29.20%, IV rank 3.75%, expected move 8.37%. The collar on SRCE 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 SRCE specifically: IV regime affects collar pricing on both sides; compressed SRCE IV at 29.20% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 8.37% (roughly $5.96 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 SRCE expiries trade a higher absolute premium for lower per-day decay. Position sizing on SRCE should anchor to the underlying notional of $71.22 per share and to the trader's directional view on SRCE stock.
SRCE collar setup
The SRCE 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 SRCE near $71.22, the first option leg uses a $74.78 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SRCE 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 SRCE shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $71.22 | long |
| Sell 1 | Call | $74.78 | N/A |
| Buy 1 | Put | $67.66 | N/A |
SRCE collar risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
SRCE collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on SRCE. 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.
When traders use collar on SRCE
Collars on SRCE hedge an existing long SRCE 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.
SRCE thesis for this collar
The market-implied 1-standard-deviation range for SRCE extends from approximately $65.26 on the downside to $77.18 on the upside. A SRCE collar hedges an existing long SRCE 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 SRCE IV rank near 3.75% 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 SRCE at 29.20%. As a Financial Services name, SRCE options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SRCE-specific events.
SRCE 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. SRCE positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move SRCE alongside the broader basket even when SRCE-specific fundamentals are unchanged. Always rebuild the position from current SRCE chain quotes before placing a trade.
Frequently asked questions
- What is a collar on SRCE?
- A collar on SRCE is the collar strategy applied to SRCE (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 SRCE stock trading near $71.22, the strikes shown on this page are snapped to the nearest listed SRCE chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are SRCE 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 SRCE collar priced from the end-of-day chain at a 30-day expiry (ATM IV 29.20%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a SRCE collar?
- The breakeven for the SRCE collar priced on this page is no defined breakeven on the modeled curve 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 SRCE market-implied 1-standard-deviation expected move is approximately 8.37%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on SRCE?
- Collars on SRCE hedge an existing long SRCE 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 SRCE implied volatility affect this collar?
- SRCE ATM IV is at 29.20% with IV rank near 3.75%, 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.