UAN Collar Strategy
UAN (CVR Partners, LP), in the Basic Materials sector, (Agricultural Inputs industry), listed on NYSE.
CVR Partners, LP, together with its subsidiaries, engages in the production and sale of nitrogen fertilizer products in the United States. The company offers ammonia products for agricultural and industrial customers; and urea and ammonium nitrate products to agricultural customers, as well as retailers and distributors. CVR GP, LLC serves as the general partner of the company. CVR Partners, LP was incorporated in 2007 and is headquartered in Sugar Land, Texas.
UAN (CVR Partners, LP) trades in the Basic Materials sector, specifically Agricultural Inputs, with a market capitalization of approximately $1.38B, a trailing P/E of 11.36, a beta of 0.31 versus the broader market, a 52-week range of 80.01-139.5, average daily share volume of 98K, a public-listing history dating back to 2011, approximately 316 full-time employees. These structural characteristics shape how UAN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.31 indicates UAN has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. The trailing P/E of 11.36 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. UAN pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on UAN?
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 UAN snapshot
As of May 15, 2026, spot at $129.28, ATM IV 49.00%, IV rank 16.78%, expected move 14.05%. The collar on UAN 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 UAN specifically: IV regime affects collar pricing on both sides; compressed UAN IV at 49.00% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 14.05% (roughly $18.16 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 UAN expiries trade a higher absolute premium for lower per-day decay. Position sizing on UAN should anchor to the underlying notional of $129.28 per share and to the trader's directional view on UAN stock.
UAN collar setup
The UAN 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 UAN near $129.28, the first option leg uses a $135.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed UAN 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 UAN shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $129.28 | long |
| Sell 1 | Call | $135.00 | $5.35 |
| Buy 1 | Put | $125.00 | $5.30 |
UAN collar risk and reward
- Net Premium / Debit
- -$12,923.00
- Max Profit (per contract)
- $577.00
- Max Loss (per contract)
- -$423.00
- Breakeven(s)
- $129.23
- Risk / Reward Ratio
- 1.364
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.
UAN collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on UAN. 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% | -$423.00 |
| $28.59 | -77.9% | -$423.00 |
| $57.18 | -55.8% | -$423.00 |
| $85.76 | -33.7% | -$423.00 |
| $114.34 | -11.6% | -$423.00 |
| $142.93 | +10.6% | +$577.00 |
| $171.51 | +32.7% | +$577.00 |
| $200.09 | +54.8% | +$577.00 |
| $228.68 | +76.9% | +$577.00 |
| $257.26 | +99.0% | +$577.00 |
When traders use collar on UAN
Collars on UAN hedge an existing long UAN 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.
UAN thesis for this collar
The market-implied 1-standard-deviation range for UAN extends from approximately $111.12 on the downside to $147.44 on the upside. A UAN collar hedges an existing long UAN 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 UAN IV rank near 16.78% 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 UAN at 49.00%. As a Basic Materials name, UAN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to UAN-specific events.
UAN 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. UAN positions also carry Basic Materials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move UAN alongside the broader basket even when UAN-specific fundamentals are unchanged. Always rebuild the position from current UAN chain quotes before placing a trade.
Frequently asked questions
- What is a collar on UAN?
- A collar on UAN is the collar strategy applied to UAN (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 UAN stock trading near $129.28, the strikes shown on this page are snapped to the nearest listed UAN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are UAN 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 UAN collar priced from the end-of-day chain at a 30-day expiry (ATM IV 49.00%), the computed maximum profit is $577.00 per contract and the computed maximum loss is -$423.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a UAN collar?
- The breakeven for the UAN collar priced on this page is roughly $129.23 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 UAN market-implied 1-standard-deviation expected move is approximately 14.05%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on UAN?
- Collars on UAN hedge an existing long UAN 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 UAN implied volatility affect this collar?
- UAN ATM IV is at 49.00% with IV rank near 16.78%, 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.