STEP Collar Strategy
STEP (StepStone Group Inc.), in the Financial Services sector, (Asset Management industry), listed on NASDAQ.
StepStone Group Inc. is an investment firm specializing in direct, fund of funds, secondary direct, and secondary indirect investments. For direct investment, it seeks to invest in venture debt, incubation, mezzanine, distressed/vulture, seed/startup, early venture, mid venture, late venture, emerging growth, later stage, turnaround, growth capital, industry consolidation, recapitalization, and buyout investments in mature and middle market companies. It prefers to invest in natural resources, technology, healthcare, services, materials, manufacturing, consumer durables, apparel, hotels, restaurants and leisure, media, retailing, consumer staples, financials, telecommunication services, energy, infrastructure, real estate, and real asset. The firm invests globally with a focus on United States, North America, Europe, Asia, Latin America, Middle East, Africa, Brazil, Mexico, Argentina, Colombia, New Zealand, China, India, Korea, Japan, Taiwan, and Australia region. It typically invests between $15 million and $200 million in firms with enterprise value between $150 million and $25000 million. The firm invests between 5% and 40% in emerging markets.
STEP (StepStone Group Inc.) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $6.82B, a beta of 1.33 versus the broader market, a 52-week range of 40.58-77.795, average daily share volume of 1.3M, a public-listing history dating back to 2020, approximately 1K full-time employees. These structural characteristics shape how STEP stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.33 indicates STEP has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. STEP pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on STEP?
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 STEP snapshot
As of May 15, 2026, spot at $53.50, ATM IV 50.00%, IV rank 7.32%, expected move 14.33%. The collar on STEP 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 STEP specifically: IV regime affects collar pricing on both sides; compressed STEP IV at 50.00% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 14.33% (roughly $7.67 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 STEP expiries trade a higher absolute premium for lower per-day decay. Position sizing on STEP should anchor to the underlying notional of $53.50 per share and to the trader's directional view on STEP stock.
STEP collar setup
The STEP 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 STEP near $53.50, the first option leg uses a $56.18 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed STEP 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 STEP shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $53.50 | long |
| Sell 1 | Call | $56.18 | N/A |
| Buy 1 | Put | $50.82 | N/A |
STEP 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.
STEP collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on STEP. 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 STEP
Collars on STEP hedge an existing long STEP 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.
STEP thesis for this collar
The market-implied 1-standard-deviation range for STEP extends from approximately $45.83 on the downside to $61.17 on the upside. A STEP collar hedges an existing long STEP 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 STEP IV rank near 7.32% 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 STEP at 50.00%. As a Financial Services name, STEP options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to STEP-specific events.
STEP 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. STEP positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move STEP alongside the broader basket even when STEP-specific fundamentals are unchanged. Always rebuild the position from current STEP chain quotes before placing a trade.
Frequently asked questions
- What is a collar on STEP?
- A collar on STEP is the collar strategy applied to STEP (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 STEP stock trading near $53.50, the strikes shown on this page are snapped to the nearest listed STEP chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are STEP 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 STEP collar priced from the end-of-day chain at a 30-day expiry (ATM IV 50.00%), 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 STEP collar?
- The breakeven for the STEP 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 STEP market-implied 1-standard-deviation expected move is approximately 14.33%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on STEP?
- Collars on STEP hedge an existing long STEP 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 STEP implied volatility affect this collar?
- STEP ATM IV is at 50.00% with IV rank near 7.32%, 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.