How are TD 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 TD collar priced from the end-of-day chain at a 30-day expiry (ATM IV 18.60%), the computed maximum profit is $447.50 per contract and the computed maximum loss is -$552.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a TD collar?

The breakeven for the TD collar priced on this page is roughly $120.53 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 TD market-implied 1-standard-deviation expected move is approximately 5.33%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current TD implied volatility affect this collar?

TD ATM IV is at 18.60% with IV rank near 8.84%, 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.

TD Collar Strategy

TD (The Toronto-Dominion Bank), in the Financial Services sector, (Banks - Diversified industry), listed on NYSE.

The Toronto-Dominion Bank, along with its affiliated entities, delivers a comprehensive array of financial solutions and services across Canada, the United States, and various international markets. Its operations are structured into three primary divisions: Canadian Retail, U.S. Retail, and Wholesale Banking. For individual customers, the bank provides fundamental deposit products like checking, savings, and investment accounts. Businesses can access a suite of offerings including funding, investment management, cash flow solutions, international trade facilities, and everyday banking. Furthermore, TD offers point-of-sale financing options for major purchases such as automobiles and recreational vehicles.

TD (The Toronto-Dominion Bank) trades in the Financial Services sector, specifically Banks - Diversified, with a market capitalization of approximately $202.10B, a trailing P/E of 18.94, a beta of 0.88 versus the broader market, a 52-week range of 72.21-120.98, average daily share volume of 2.4M, a public-listing history dating back to 1996, approximately 100K full-time employees. These structural characteristics shape how TD stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.88 places TD roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. TD pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a collar on TD?

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 TD snapshot

As of June 29, 2026, spot at $120.30, ATM IV 18.60%, IV rank 8.84%, expected move 5.33%. The collar on TD 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 18-day expiry.

Why this collar structure on TD specifically: IV regime affects collar pricing on both sides; compressed TD IV at 18.60% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 5.33% (roughly $6.41 on the underlying). The 18-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated TD expiries trade a higher absolute premium for lower per-day decay. Position sizing on TD should anchor to the underlying notional of $120.30 per share and to the trader's directional view on TD stock.

TD collar setup

The TD 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 TD near $120.30, the first option leg uses a $125.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TD chain at a 18-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 TD shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$120.30	long
Sell 1	Call	$125.00	$0.30
Buy 1	Put	$115.00	$0.53

TD collar risk and reward

Net Premium / Debit: -$12,052.50
Max Profit (per contract): $447.50
Max Loss (per contract): -$552.50
Breakeven(s): $120.53
Risk / Reward Ratio: 0.810

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.

TD collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on TD. 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.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$552.50
$26.61	-77.9%	-$552.50
$53.21	-55.8%	-$552.50
$79.80	-33.7%	-$552.50
$106.40	-11.6%	-$552.50
$133.00	+10.6%	+$447.50
$159.60	+32.7%	+$447.50
$186.20	+54.8%	+$447.50
$212.79	+76.9%	+$447.50
$239.39	+99.0%	+$447.50

When traders use collar on TD

Collars on TD hedge an existing long TD 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.

TD thesis for this collar

The market-implied 1-standard-deviation range for TD extends from approximately $113.89 on the downside to $126.71 on the upside. A TD collar hedges an existing long TD 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 TD IV rank near 8.84% 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 TD at 18.60%. As a Financial Services name, TD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TD-specific events.

TD 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. TD positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TD alongside the broader basket even when TD-specific fundamentals are unchanged. Always rebuild the position from current TD chain quotes before placing a trade.

Frequently asked questions

What is a collar on TD?: A collar on TD is the collar strategy applied to TD (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 TD stock trading near $120.30, the strikes shown on this page are snapped to the nearest listed TD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are TD 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 TD collar priced from the end-of-day chain at a 30-day expiry (ATM IV 18.60%), the computed maximum profit is $447.50 per contract and the computed maximum loss is -$552.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a TD collar?: The breakeven for the TD collar priced on this page is roughly $120.53 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 TD market-implied 1-standard-deviation expected move is approximately 5.33%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on TD?: Collars on TD hedge an existing long TD 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 TD implied volatility affect this collar?: TD ATM IV is at 18.60% with IV rank near 8.84%, 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.