SRE Collar Strategy
SRE (Sempra), in the Utilities sector, (Diversified Utilities industry), listed on NYSE.
Sempra, an energy holding company founded in 1998 and headquartered in San Diego, California, conducts its operations both domestically and internationally. The firm adopted its current name in July 2021, having previously been known as Sempra Energy. Through its San Diego Gas & Electric Company division, Sempra delivers electricity to approximately 3.6 million individuals and natural gas to roughly 3.3 million individuals across a 4,100 square mile service area. The Southern California Gas Company segment manages an extensive natural gas network, encompassing distribution, transmission, and storage infrastructure, which supplies gas to an estimated 22 million people within a 24,000 square mile territory. Furthermore, Sempra's Texas Utilities division specializes in the regulated transmission and distribution of electrical power, serving 3.8 million residential and commercial customers. This segment oversees 140,000 miles of transmission and distribution lines, including 18,249 circuit miles of transmission lines and 1,174 transmission and distribution substations.
SRE (Sempra) trades in the Utilities sector, specifically Diversified Utilities, with a market capitalization of approximately $61.59B, a trailing P/E of 29.75, a beta of 0.58 versus the broader market, a 52-week range of 73.18-101.04, average daily share volume of 3.7M, a public-listing history dating back to 1998, approximately 17K full-time employees. These structural characteristics shape how SRE stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.58 indicates SRE has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. SRE pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on SRE?
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 SRE snapshot
As of June 30, 2026, spot at $93.11, ATM IV 23.80%, IV rank 50.34%, expected move 6.82%. The collar on SRE 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 17-day expiry.
Why this collar structure on SRE specifically: IV regime affects collar pricing on both sides; mid-range SRE IV at 23.80% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 6.82% (roughly $6.35 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated SRE expiries trade a higher absolute premium for lower per-day decay. Position sizing on SRE should anchor to the underlying notional of $93.11 per share and to the trader's directional view on SRE stock.
SRE collar setup
The SRE 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 SRE near $93.11, the first option leg uses a $97.77 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SRE chain at a 17-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 SRE shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $93.11 | long |
| Sell 1 | Call | $97.77 | N/A |
| Buy 1 | Put | $88.45 | N/A |
SRE 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.
SRE collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on SRE. 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 SRE
Collars on SRE hedge an existing long SRE 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.
SRE thesis for this collar
The market-implied 1-standard-deviation range for SRE extends from approximately $86.76 on the downside to $99.46 on the upside. A SRE collar hedges an existing long SRE 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 SRE IV rank near 50.34% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on SRE should anchor more to the directional view and the expected-move geometry. As a Utilities name, SRE options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SRE-specific events.
SRE 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. SRE positions also carry Utilities sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move SRE alongside the broader basket even when SRE-specific fundamentals are unchanged. Always rebuild the position from current SRE chain quotes before placing a trade.
Frequently asked questions
- What is a collar on SRE?
- A collar on SRE is the collar strategy applied to SRE (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 SRE stock trading near $93.11, the strikes shown on this page are snapped to the nearest listed SRE chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are SRE 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 SRE collar priced from the end-of-day chain at a 30-day expiry (ATM IV 23.80%), 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 SRE collar?
- The breakeven for the SRE 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 SRE market-implied 1-standard-deviation expected move is approximately 6.82%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on SRE?
- Collars on SRE hedge an existing long SRE 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 SRE implied volatility affect this collar?
- SRE ATM IV is at 23.80% with IV rank near 50.34%, 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.