TXN Collar Strategy
TXN (Texas Instruments Incorporated), in the Technology sector, (Semiconductors industry), listed on NASDAQ.
Texas Instruments Incorporated (TI) specializes in the global design, production, and sale of semiconductors to electronics engineers and manufacturers. Its operations are structured into two core segments: Analog and Embedded Processing. The Analog division provides a comprehensive suite of power management products, such as battery-management solutions, various DC/DC and AC/DC switching regulators and controllers, power switches, linear regulators, voltage supervisors, references, and lighting components, all critical for managing diverse power needs. This segment also delivers signal chain products designed to sense, condition, and measure electrical signals, facilitating information transfer or conversion for further processing and control, encompassing items like amplifiers, data converters, interface devices, motor drives, clocks, and sensing technologies. The Embedded Processing segment develops microcontrollers, integral to a wide array of electronic equipment; digital signal processors (DSPs) for complex mathematical computations; and applications processors tailored for specific computing tasks. Products from this segment are utilized across numerous markets, including industrial applications, the automotive sector, personal electronics, communication systems, enterprise solutions, and calculators.
TXN (Texas Instruments Incorporated) trades in the Technology sector, specifically Semiconductors, with a market capitalization of approximately $259.76B, a trailing P/E of 48.34, a beta of 1.31 versus the broader market, a 52-week range of 152.73-334.03, average daily share volume of 8.5M, a public-listing history dating back to 1972, approximately 34K full-time employees. These structural characteristics shape how TXN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.31 indicates TXN has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. The trailing P/E of 48.34 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple. TXN pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on TXN?
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 TXN snapshot
As of June 30, 2026, spot at $299.20, ATM IV 66.55%, IV rank 100.00%, expected move 19.08%. The collar on TXN 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 31-day expiry.
Why this collar structure on TXN specifically: IV regime affects collar pricing on both sides; elevated TXN IV at 66.55% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 19.08% (roughly $57.08 on the underlying). The 31-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated TXN expiries trade a higher absolute premium for lower per-day decay. Position sizing on TXN should anchor to the underlying notional of $299.20 per share and to the trader's directional view on TXN stock.
TXN collar setup
The TXN 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 TXN near $299.20, the first option leg uses a $315.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TXN chain at a 31-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 TXN shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $299.20 | long |
| Sell 1 | Call | $315.00 | $16.08 |
| Buy 1 | Put | $285.00 | $16.53 |
TXN collar risk and reward
- Net Premium / Debit
- -$29,965.00
- Max Profit (per contract)
- $1,535.00
- Max Loss (per contract)
- -$1,465.00
- Breakeven(s)
- $299.65
- Risk / Reward Ratio
- 1.048
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.
TXN collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on TXN. 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.
| Underlying Price | % From Spot | P&L at Expiration |
|---|---|---|
| $0.01 | -100.0% | -$1,465.00 |
| $66.16 | -77.9% | -$1,465.00 |
| $132.32 | -55.8% | -$1,465.00 |
| $198.47 | -33.7% | -$1,465.00 |
| $264.62 | -11.6% | -$1,465.00 |
| $330.78 | +10.6% | +$1,535.00 |
| $396.93 | +32.7% | +$1,535.00 |
| $463.09 | +54.8% | +$1,535.00 |
| $529.24 | +76.9% | +$1,535.00 |
| $595.39 | +99.0% | +$1,535.00 |
When traders use collar on TXN
Collars on TXN hedge an existing long TXN 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.
TXN thesis for this collar
The market-implied 1-standard-deviation range for TXN extends from approximately $242.12 on the downside to $356.28 on the upside. A TXN collar hedges an existing long TXN 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 TXN IV rank near 100.00% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on TXN at 66.55%. As a Technology name, TXN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TXN-specific events.
TXN 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. TXN positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TXN alongside the broader basket even when TXN-specific fundamentals are unchanged. Always rebuild the position from current TXN chain quotes before placing a trade.
Frequently asked questions
- What is a collar on TXN?
- A collar on TXN is the collar strategy applied to TXN (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 TXN stock trading near $299.20, the strikes shown on this page are snapped to the nearest listed TXN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TXN 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 TXN collar priced from the end-of-day chain at a 30-day expiry (ATM IV 66.55%), the computed maximum profit is $1,535.00 per contract and the computed maximum loss is -$1,465.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a TXN collar?
- The breakeven for the TXN collar priced on this page is roughly $299.65 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 TXN market-implied 1-standard-deviation expected move is approximately 19.08%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on TXN?
- Collars on TXN hedge an existing long TXN 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 TXN implied volatility affect this collar?
- TXN ATM IV is at 66.55% with IV rank near 100.00%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.