How are TKR 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 TKR collar priced from the end-of-day chain at a 30-day expiry (ATM IV 39.30%), the computed maximum profit is $520.00 per contract and the computed maximum loss is -$480.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a TKR collar?

The breakeven for the TKR collar priced on this page is roughly $144.80 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 TKR market-implied 1-standard-deviation expected move is approximately 11.27%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current TKR implied volatility affect this collar?

TKR ATM IV is at 39.30% with IV rank near 5.60%, 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.

TKR Collar Strategy

TKR (The Timken Company), in the Industrials sector, (Manufacturing - Tools & Accessories industry), listed on NYSE.

The Timken Company operates globally, specializing in the design, manufacturing, and management of advanced bearings and power transmission solutions. Its business activities are organized into two main divisions: Mobile Industries and Process Industries. The Mobile Industries division delivers a wide array of products, encompassing various bearings, seals, and lubrication systems, in addition to power transmission parts like engineered chains, augers, belts, couplings, clutches, and brakes. This segment also provides related offerings and maintenance support. Its clientele includes original equipment manufacturers (OEMs) and direct users of off-highway machinery in agriculture, construction, mining, outdoor power, and power sports. It also serves the on-highway vehicle sector, covering passenger cars, light and heavy trucks, as well as rail cars and locomotives.

TKR (The Timken Company) trades in the Industrials sector, specifically Manufacturing - Tools & Accessories, with a market capitalization of approximately $9.81B, a trailing P/E of 31.87, a beta of 1.23 versus the broader market, a 52-week range of 70.57-145.61, average daily share volume of 979K, a public-listing history dating back to 1922, approximately 19K full-time employees. These structural characteristics shape how TKR stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.23 places TKR roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. TKR pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a collar on TKR?

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 TKR snapshot

As of June 30, 2026, spot at $145.20, ATM IV 39.30%, IV rank 5.60%, expected move 11.27%. The collar on TKR 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 TKR specifically: IV regime affects collar pricing on both sides; compressed TKR IV at 39.30% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 11.27% (roughly $16.36 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 TKR expiries trade a higher absolute premium for lower per-day decay. Position sizing on TKR should anchor to the underlying notional of $145.20 per share and to the trader's directional view on TKR stock.

TKR collar setup

The TKR 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 TKR near $145.20, the first option leg uses a $150.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TKR 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 TKR shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$145.20	long
Sell 1	Call	$150.00	$3.13
Buy 1	Put	$140.00	$2.73

TKR collar risk and reward

Net Premium / Debit: -$14,480.00
Max Profit (per contract): $520.00
Max Loss (per contract): -$480.00
Breakeven(s): $144.80
Risk / Reward Ratio: 1.083

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.

TKR collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on TKR. 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%	-$480.00
$32.11	-77.9%	-$480.00
$64.22	-55.8%	-$480.00
$96.32	-33.7%	-$480.00
$128.42	-11.6%	-$480.00
$160.53	+10.6%	+$520.00
$192.63	+32.7%	+$520.00
$224.73	+54.8%	+$520.00
$256.84	+76.9%	+$520.00
$288.94	+99.0%	+$520.00

When traders use collar on TKR

Collars on TKR hedge an existing long TKR 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.

TKR thesis for this collar

The market-implied 1-standard-deviation range for TKR extends from approximately $128.84 on the downside to $161.56 on the upside. A TKR collar hedges an existing long TKR 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 TKR IV rank near 5.60% 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 TKR at 39.30%. As a Industrials name, TKR options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TKR-specific events.

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

Frequently asked questions

What is a collar on TKR?: A collar on TKR is the collar strategy applied to TKR (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 TKR stock trading near $145.20, the strikes shown on this page are snapped to the nearest listed TKR chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are TKR 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 TKR collar priced from the end-of-day chain at a 30-day expiry (ATM IV 39.30%), the computed maximum profit is $520.00 per contract and the computed maximum loss is -$480.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a TKR collar?: The breakeven for the TKR collar priced on this page is roughly $144.80 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 TKR market-implied 1-standard-deviation expected move is approximately 11.27%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on TKR?: Collars on TKR hedge an existing long TKR 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 TKR implied volatility affect this collar?: TKR ATM IV is at 39.30% with IV rank near 5.60%, 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.